What a systematic withdrawal plan does
An SWP redeems a fixed amount from a mutual fund every month while the rest stays invested. ₹50 lakh earning 8% supports a ₹30,000 monthly withdrawal for over 30 years, but ₹50,000 a month exhausts it in about 13 years. The calculator shows the balance left, or the year the corpus runs out.
Choosing a safe withdrawal
Withdrawing less than the monthly return (corpus × annual return ÷ 12) keeps the corpus intact forever before inflation. Retirees usually combine an SWP from a hybrid or debt fund with an equity portion that is left to grow, and raise the withdrawal 5–6% a year to match inflation.
Frequently asked questions
Is SWP better than FD interest for retirement?
SWP from equity or hybrid funds is often more tax-efficient, since only the gain portion of each withdrawal is taxed, but returns are not guaranteed.
How is SWP taxed?
Each withdrawal is a redemption; capital gains tax applies on the gain part, with equity gains above ₹1.25 lakh a year taxed at 12.5%.
Can I change the withdrawal amount?
Yes, most fund houses let you modify or stop an SWP at any time.