SWP (Systematic Withdrawal Plan) Calculator

What is SWP (Systematic Withdrawal Plan)?

SWP stands for Systematic Withdrawal Plan. It's a facility offered by mutual funds that allows investors to withdraw a fixed amount of money from their investment portfolio at regular intervals (e.g., monthly, quarterly).

Under SWP, if you invest a lump sum in a mutual fund, you can set an amount you’ll withdraw regularly and the frequency at which you’ll withdraw. This provides a steady cash flow, often used by retirees or those needing regular income from their investments.

The withdrawals are made by redeeming units of the mutual fund scheme at the prevailing Net Asset Value (NAV). The remaining investment continues to potentially grow based on market performance and the scheme's returns.

Pros of SWP

• Provides regular income stream from investments.
• Can be customized for withdrawal amount and frequency.
• Remaining investment continues to have potential for growth.
• Helps manage cash flow needs, especially during retirement.

Cons of SWP

• Withdrawals during market downturns can deplete capital faster (Sequence of Returns Risk).
• Investment value is still subject to market risk.
• High withdrawal rates might exhaust the corpus prematurely.
• Withdrawals might be subject to exit loads (if applicable) and capital gains tax.

Disclaimer: Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing. This calculator provides estimates based on inputs and does not guarantee future results or balances. Past performance is not indicative of future returns. Consult with a financial advisor before making investment decisions.