SSY Calculator
Sukanya Samriddhi Yojana (Girl Child)| Year | Deposit | Interest | Balance |
|---|
What is a Systematic Withdrawal Plan (SWP)?
An SWP allows you to withdraw a fixed amount of money from your mutual fund investments at regular intervals (usually monthly). It is the exact opposite of an SIP. While SIP is for Wealth Creation, SWP is for Income Generation.
SWP is the most popular tool for retirees who want a regular monthly income (like a salary) from their accumulated corpus (PF, Gratuity, or Savings).
How to Use This SWP Calculator?
- Total Investment: Enter the lumpsum amount you have (e.g., ₹50 Lakh).
- Withdrawal Amount: How much do you need monthly? (e.g., ₹30,000).
- Expected Return: Conservative equity funds give ~10-12%, Debt funds give ~7-8%.
- Advanced Option (Inflation): If you select a 5% step-up, your monthly withdrawal will increase by 5% every year to match rising prices.
SWP vs Dividend Option: Which is Better?
Many people choose the “Dividend Payout” option in Mutual Funds, but SWP is far superior due to tax efficiency.
| Feature | SWP (Growth Plan) | Dividend Option (IDCW) |
|---|---|---|
| Regularity | Fixed (You decide the date & amount) | Uncertain (Depends on fund profits) |
| Taxation | Capital Gains Tax (Only on profit part) | Taxed as per your Income Slab |
| Control | Full Control | No Control |
The “Safe Withdrawal Rate” Rule
A common question is: “How much should I withdraw so my money never ends?”
Financial planners suggest the 4% to 6% Rule. If your annual withdrawal is within 4-6% of your total corpus, your money will likely last for 20-30 years easily.
Example: If you have ₹1 Crore, withdraw ₹4 Lakh to ₹6 Lakh per year (₹33k to ₹50k per month).
Is SWP tax-free?
No, but it is tax-efficient. In SWP, every withdrawal consists of two parts: Principal (Capital) and Profit (Gain). You only pay tax on the Profit part. As per LTCG rules (Equity), gains up to ₹1.25 Lakh per year are tax-free.
Can I stop SWP anytime?
Yes, SWP is completely flexible. You can stop, increase, or decrease the amount anytime by instructing the AMC.