A Systematic Withdrawal Plan (SWP) allows you to withdraw a fixed amount from your mutual fund or investment portfolio at regular intervals. It is commonly used by retirees to generate a steady income stream while the remaining corpus continues to appreciate. SWP provides predictable cash flows and helps in financial planning.

SWP offers better tax efficiency compared to regular income options like FD interest or dividends. Only the capital gains portion of each withdrawal is taxable, not the entire amount. For equity-oriented funds, LTCG up to ₹1 lakh per year is tax-free. This makes SWP a tax-efficient way to generate regular income from investments.

Inflation erodes the purchasing power of your withdrawals over time. A ₹25,000 monthly withdrawal today may be worth significantly less in real terms 15 years later. Our SWP calculator accounts for this by automatically increasing the withdrawal amount each year by the specified inflation rate, giving you a realistic picture of how long your corpus will last.

The safe withdrawal rate (SWR) concept suggests withdrawing 3-4% of your initial corpus annually, adjusted for inflation, to make your corpus last 25-30 years. Higher withdrawal rates increase the risk of depleting your corpus early. Factors like expected returns, inflation, and life expectancy should guide your withdrawal strategy.