SWP Calculator

Your Trusted Partner in Financial Planning

How to Use the SWP Calculator?

Using the SWP (Systematic Withdrawal Plan) calculator is simple and straightforward. Follow these steps to estimate your monthly withdrawals and understand how your investments grow over time.

Step 1: Enter Your Initial Investment

Start by entering the total amount you’ve invested in mutual funds. For example, if you’ve invested ₹5,00,000, input this value in the "Initial Investment" field.

Step 2: Specify the Monthly Withdrawal Amount

Decide how much money you want to withdraw monthly. For instance, if you need ₹10,000 per month, enter this amount in the "Monthly Withdrawal Amount" field.

Step 3: Input the Expected Annual Return

Enter the expected annual return on your investment. For mutual funds, this could range from 6% to 12%, depending on market conditions. For example, input 8% as the annual return.

Step 4: Set the Tenure

Specify the duration (in years) for which you want to withdraw funds. For example, if you plan to withdraw for 5 years, input "5" in the "Tenure" field.

Step 5: Click "Calculate"

Once all the inputs are filled, click the "Calculate" button. The calculator will display:

  • Total Withdrawals: The total amount you’ll withdraw over the tenure.
  • Final Corpus: The remaining balance in your account after the tenure ends.
  • Total Returns: The net returns generated from your investment.

Example Calculation

Let’s walk through an example to see how the SWP calculator works:

  • Initial Investment: ₹5,00,000
  • Monthly Withdrawal: ₹10,000
  • Annual Return: 8%
  • Tenure: 5 years

Outcome: After 5 years, you’ll have withdrawn ₹6,00,000, and your final corpus will be approximately ₹5,218. This means your investment has grown despite regular withdrawals!

Formula Used in SWP Calculations

The SWP calculator uses the following formulas to compute results:

  1. Monthly Interest Rate:

    2. Monthly Interest Rate = Annual Return (%) ÷ (100 × 12)

    For example, if the annual return is 8%, the monthly interest rate is:

    Monthly Interest Rate = 8 ÷ (100 × 12) = 0.0066667 (or 0.66667%)

  2. Monthly Calculation:

    3. For each month, the following steps are performed:

    1. Step 1: Withdrawal
      Subtract the monthly withdrawal amount from the current corpus:
      Remaining Corpus After Withdrawal = Current Corpus - Monthly Withdrawal
    2. Step 2: Apply Interest
      Apply the monthly interest rate to the remaining corpus:
      New Corpus = Remaining Corpus After Withdrawal × (1 + Monthly Interest Rate)
  3. Full Formula for Each Month:

    4. Combining both steps, the formula for updating the corpus at the end of each month is:

    New Corpus = (Current Corpus - Monthly Withdrawal) × (1 + Monthly Interest Rate)

Why Use the SWP Calculator?

The SWP calculator helps you:

  • Plan your monthly withdrawals effectively.
  • Understand how your investment grows over time.
  • Make informed decisions about your financial goals.