Projection table
| Period | Month | Year | Start Corpus (₹) | Return (₹) | Withdrawal (₹) | End Corpus (₹) |
|---|
Notes & Tips
- SWP projection assumes returns are applied then withdrawal happens at period end.
- If the selected start date is in the future and "Deferred SWP" is checked, the corpus compounds without withdrawals until that date, then withdrawals begin on the first matching period following the date.
- Actual market returns may vary; treat projections as illustrative.
- Use "Until corpus depleted" to find how long a fixed withdrawal lasts.
Quick controls
There comes a point in life when one stops asking, “How much can I earn?” and starts wondering, “How long can I make it last?”
That is the quiet philosophy behind the Systematic Withdrawal Plan, or SWP — a plan not for accumulation, but for continuity.
If a Systematic Investment Plan (SIP) is about building wealth drop by drop, SWP is about drawing from that reservoir — gently, wisely, and with grace.
It is the bridge between one’s working years and one’s restful years — a way to live off your investments without letting them vanish too soon.
What Is an SWP?
A Systematic Withdrawal Plan (SWP) allows investors to withdraw a fixed amount of money at regular intervals from their existing mutual fund investment.
In other words, you decide:
- How much you wish to withdraw (say ₹10,000 per month)
- How often you wish to withdraw (monthly, quarterly, or annually)
The fund automatically redeems that amount and credits it to your bank account. Meanwhile, the remaining investment continues to earn returns.
So, instead of withdrawing all your money at once, you withdraw systematically, ensuring a steady flow of income — much like a salary, but drawn from your own savings.
The Essence of SWP
At its core, an SWP is not merely a withdrawal mechanism. It’s a retirement philosophy.
It allows you to enjoy the fruits of your labour without cutting down the tree itself. The investment corpus remains partially invested, compounding quietly even as you draw from it.
For retirees, this turns their years of disciplined investing into a monthly income stream — predictable, tax-efficient, and dignified.
How SWP Works
Let’s say you invested ₹10 lakh in a mutual fund that offers an average annual return of 10%.
You decide to withdraw ₹10,000 per month through an SWP.
- Every month, ₹10,000 is redeemed from your fund units.
- The rest of your investment continues to grow with market returns.
If the fund performs well, your corpus might last indefinitely — even grow — while providing regular income.
If markets fall for a long period, your corpus may gradually shrink, but you still retain control over how much you withdraw and for how long.
It’s a balance — between living today and preserving tomorrow.
Why People Choose SWP
1. Regular Income:
Perfect for retirees or anyone seeking a steady monthly inflow. The money comes like a salary, only this time it’s paid by your investments.
2. Market Participation:
Unlike fixed deposits, your principal stays invested in mutual funds, allowing it to grow with the market.
3. Tax Efficiency:
Only the withdrawn portion (capital gains) is taxed — and if you choose equity funds and hold them for over a year, long-term capital gains up to ₹1 lakh per year are tax-free.
4. Flexibility:
You can start, stop, or modify the withdrawal amount anytime. There are no penalties or rigid lock-ins.
5. Capital Preservation (with planning):
When returns exceed withdrawals, your capital continues to grow even as you enjoy regular income.
SWP vs SIP: The Circle of Investment Life
| Feature | SIP | SWP |
|---|---|---|
| Purpose | To build wealth systematically | To withdraw wealth systematically |
| Flow of Money | From bank to mutual fund | From mutual fund to bank |
| Ideal For | Working individuals building savings | Retirees or those seeking income |
| Time Horizon | Long-term accumulation | Long-term distribution |
| Emotion Behind It | Hope | Peace |
SIP is the inhalation — the act of building.
SWP is the exhalation — the act of living from what you’ve built.
The two are not opposites; they are two halves of a balanced financial life.
The Smart Way to Use SWP
- Choose the Right Fund:
Opt for a balanced hybrid or equity-oriented fund if you want growth, or a debt fund for stability.
Avoid aggressive funds that may fluctuate heavily. - Set a Realistic Withdrawal Rate:
Ideally, withdraw no more than 6–8% per year of your total corpus.
This helps sustain your investment over the long term without depleting it. - Time Your Start:
If you begin your SWP during a strong market phase, the early gains help cushion later volatility. - Review Annually:
Reassess your withdrawal rate based on fund performance, inflation, and personal needs.
A Word of Caution
While SWP offers comfort and flexibility, it is not immune to risks:
- Market Volatility: In weak markets, frequent withdrawals can erode capital faster.
- Over-Withdrawal: Taking out too much too soon may leave you with insufficient funds later.
- Fund Selection Errors: The wrong fund choice can undermine the whole plan.
Thus, SWP demands the same wisdom as SIP — only in reverse. Where SIP tests your patience to invest, SWP tests your prudence to withdraw.
The Emotional Side of SWP
There is something deeply human about the SWP concept.
It’s not about chasing returns anymore — it’s about continuing life with dignity.
For retirees, each monthly credit from their SWP is more than a transaction — it’s a reminder of years spent working, saving, and planning wisely.
It replaces dependency with confidence, anxiety with rhythm.
You no longer wait for the next paycheck — you become your own employer.
A Thought in Closing
In finance, there are products that make you rich, and there are products that make you peaceful. The Systematic Withdrawal Plan belongs to the latter kind.
It teaches that true wealth lies not in accumulation, but in sustainability — in knowing how to draw just enough from life without draining its essence.
As Yogi might say:
“SIP is the art of planting. SWP is the art of pruning. Both require care, both reward patience — and both, when done with wisdom, make life bloom.”