Make smart withdrawal plans with our SWP calculator!
SWP Calculator
Estimate the future returns of your Systematic Withdrawal Plan (SWP) and create a sustainable income stream. Input your investment details, desired withdrawal frequency, and amount to receive personalized projections to achieve your financial aspirations.
What is a SWP calculator
A SWP calculator is a financial tool that assists investors in planning regular withdrawals from their mutual fund investment. Users input key details like the initial investment, withdrawal frequency, withdrawal amount, and start date. The SWP calculator then calculates and displays information about the number of withdrawals, withdrawal amounts, and the projected remaining investment balance over time.
With the SWP mutual fund calculator, you can make informed decisions about your withdrawal strategy, ensuring that you can generate a steady income stream while preserving the longevity and growth potential of your investment portfolio.
How does the SWP calculator work?
A SWP calculator determines the periodic withdrawals you can make from a mutual fund while maintaining a desired level of income or portfolio balance. It considers factors like the initial investment, desired withdrawal amount, investment duration, and expected rate of return.
Using these inputs, the calculator estimates the frequency and number of withdrawals needed to meet your financial goals. It helps you plan for regular income or manage your investments to meet specific financial needs, such as retirement.
The SWP calculator ensures a systematic and sustainable approach to fund withdrawals, optimizing financial security.
Here is the formula for the SWP calculator.
Withdrawal Amount = (Initial Investment Amount × Withdrawal Rate) + (Fund Growth × Withdrawal Rate)
For example:Priya invested Rs. 5,00,000 in an equity fund giving 8% returns p.a. (0.0067% per month) for an investment period of 12 months. She wants to make monthly withdrawals of Rs. 10,000 starting from the 1st month. Every month, Priya’s investment will be reduced by Rs. 10,000. What is left after the withdrawal will remain invested in the chosen fund.
Here is a table that shows Priya’s returns and withdrawals:
| Month | Opening Balance | Interest Earned | Withdrawal | Closing Balance |
|---|---|---|---|---|
| 1 | 500,000 | 2,958 | 10,000 | 492,958 |
| 2 | 492,958 | 2,920 | 10,000 | 485,878 |
| 3 | 485,878 | 2,881 | 10,000 | 478,759 |
| 4 | 478,759 | 2,843 | 10,000 | 471,602 |
| 5 | 471,602 | 2,804 | 10,000 | 464,406 |
| 6 | 464,406 | 2,765 | 10,000 | 457,170 |
| 7 | 457,170 | 2,727 | 10,000 | 449,894 |
| 8 | 449,894 | 2,688 | 10,000 | 442,580 |
| 9 | 442,580 | 2,650 | 10,000 | 435,230 |
| 10 | 464,406 | 2,765 | 10,000 | 457,170 |
| 11 | 457,170 | 2,727 | 10,000 | 449,894 |
| 12 | 420,413 | 2,534 | 10,000 | 412,947 |
At the end of her investment period of 12 months, Priya earned an interest of ₹ 31,291 and the final value of her investment was ₹ 4,12,947
An SWP calculator will take into account inputs such as total investment amount, expected annual rate of interest, monthly withdrawal amount and investment period to calculate the final value of your investment. You can try different combinations on our calculator to find out the best scenario that will help you achieve your financial goals.
Advantages of SWP calculator
Assists in decision making: It allows you to evaluate different scenarios,
explore alternatives, and choose the most
suitable withdrawal plan
based on your financial objectives.
Helps you set realistic expectations: The calculator provides a realistic
projection of your investment's sustainability
and the potential income generated through regular withdrawals.
Helps in financial planning: The calculator helps you determine the withdrawal
amount and frequency aligned with your
goals and needs.
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How are SWP returns calculated?
SWP returns are calculated based on the investment amount, the rate of return earned on the investment, and the duration of the SWP. The returns are determined by tracking the growth or depreciation of the investment during the SWP period and subtracting the total amount withdrawn.
When to use SWP?
SWP can be used when you have a lump sum amount invested in a mutual fund or other investment, and you want to receive a regular stream of income from that investment. It is often used during retirement or when you have a financial goal that requires regular cash flow.
Can I start an SWP if I have invested in an SIP mutual fund?
Yes, you can start a SWP from a mutual fund, even if you have previously invested through a SIP.
How do you use an SWP calculator?
To use an SWP calculator, you typically input parameters such as the initial investment amount, expected rate of return, desired withdrawal amount, withdrawal frequency, and investment duration. The calculator then calculates the sustainability of the withdrawals, the duration for which the withdrawals can be maintained, and sometimes provides additional details such as the final value of the investment.
What is the final value in an SWP calculator?
The final value in an SWP calculator represents the remaining value of the investment after the specified SWP duration, taking into account the withdrawals made. It helps you understand the potential growth or depreciation of the investment over the SWP period.
How much return can be expected from SWP?
The return from an SWP depends on various factors such as the initial investment amount, rate of return, withdrawal frequency, and duration of the SWP. The return can vary significantly based on market conditions and the performance of the underlying investment. It is advisable to use an SWP calculator or consult with a financial advisor to estimate the potential return based on your specific investment and withdrawal parameters.
Can I choose the withdrawal amount or is it fixed?
In most cases, you can choose the withdrawal amount in an SWP. It provides flexibility for you to determine the desired amount that suits your financial needs. However, there may be minimum withdrawal limits set by the mutual fund or other investment provider.
Can only retirees invest in an SWP?
No, SWP is not limited to retirees. While it is commonly used during retirement to provide regular income, anyone with a lump sum investment can opt for SWP. It can be useful for individuals who require a steady stream of income from their investments, regardless of their age or retirement status.
The information provided on this page is for educational purposes only and should not be considered as financial advice. Past performance is not indicative of future results. Always consult with a financial advisor before making any investment decisions. Mutual fund investments are subject to market risks; please read all scheme-related documents carefully.
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