Understanding the Systematic Withdrawal Plan (SWP) and How It Works

A Systematic Withdrawal Plan, commonly known as SWP, is a method where you invest a lump sum amount in a mutual fund and then decide on a fixed sum to withdraw at regular intervals—monthly, quarterly, or yearly. The withdrawn amount is systematically deducted from your invested corpus while the remaining balance continues to grow with the fund’s returns.

Example to Illustrate SWP

Imagine you invest ₹1,00,000 in the ICICI Prudential Bluechip Fund for one year. You plan to withdraw ₹10,000 every month. Each month, ₹10,000 will be taken out from your investment, but the remaining balance will keep earning returns as per the fund’s performance.

Using our SWP calculator, you can quickly estimate how much you can withdraw over your chosen period and what will be left invested, helping you plan your finances smoothly.

Why Use a Systematic Withdrawal Plan Calculator?

Calculating periodic withdrawals and the corpus balance over time manually can be confusing and time-consuming, especially considering the effect of compounding returns on the remaining investment. The SWP calculator simplifies this by computing your withdrawal schedule and the expected corpus value precisely based on your inputs like investment amount, withdrawal sum, rate of return, withdrawal frequency, and tenure.

How to Use the SWP Calculator

• Enter the initial lump sum invested.
• Specify the amount you want to withdraw periodically.
• Input the expected annual rate of return from your mutual fund.
• Choose how often you want to withdraw (monthly, quarterly, or yearly).
• Set the tenure for which you plan to keep withdrawing.

Once you hit calculate, the tool will display your total withdrawals and the estimated balance left at the end of your chosen period.

Who Can Benefit Most from an SWP?

SWPs are particularly useful for retirees or those needing a stable monthly income from their investments besides pension or other income sources. They provide the dual advantage of regular cash flow and continued investment growth on the remaining amount.

Planning Your Investments Made Easy

Our SWP calculator empowers investors to plan systematic withdrawals effectively without needing expert knowledge. This simple tool on emifinder.com can help you set withdrawal amounts tailored to your financial goals while estimating your investment’s growth.