SWP Calculator

SWP is the opposite of SIP — you withdraw a fixed amount monthly (or quarterly) from your mutual fund corpus. The remaining balance continues to earn returns. Popular for retirees wanting a monthly pension-like cashflow while keeping the corpus invested in debt or hybrid funds. You choose the amount and date; the fund redeems units automatically and credits your bank account.

Depends on withdrawal rate vs fund return. A ₹1 crore corpus at 8% return with ₹50,000/month withdrawal lasts ~40+ years. At ₹75,000/month, ~20 years. At ₹1,00,000/month, ~13 years. The 4% safe withdrawal rule (₹33,000/month per crore) is globally validated for 30-year horizons. Go conservative — Indian inflation of 5%-6% erodes purchasing power.

Each withdrawal is partly principal and partly gain. Only the gain portion is taxed. For equity funds held 12+ months: LTCG at 12.5% above ₹1.25 lakh/year. For debt funds (post April 2023): gains taxed at slab rate. SWPs are tax-efficient vs FD interest because FIFO redemption keeps long-term portions tax-favorable and annual LTCG exemption applies.

Usually yes. FD interest is 100% taxable at slab rate — a retiree in 30% slab earning ₹8 lakh FD interest pays ₹2.4 lakh tax. Same income from SWP on a balanced advantage fund might attract just ₹20,000-50,000 LTCG. Also, SWP corpus continues to grow, while FD pays just the interest. Downside: SWP carries NAV volatility; FD is guaranteed.

Depends on asset mix. All-debt corpus: 7%-8%. Conservative hybrid (70% debt, 30% equity): 8%-10%. Balanced advantage: 10%-11%. All-equity (risky for retirees): 11%-13%. Post-retirement rule: keep 3 years of withdrawals in debt (immunized from market drops) and the rest in hybrid/equity for long-term growth.

Growth option. SEBI renamed "dividend" to IDCW (Income Distribution cum Capital Withdrawal) — it's tax-inefficient because IDCW is taxed at slab rate. SWP from growth option uses FIFO unit redemption and benefits from LTCG rates. Set up a monthly SWP mandate on the growth variant instead.