A Systematic Withdrawal Plan (SWP) is a facility that allows investors to withdraw a fixed amount from their mutual fund or investment portfolio at regular intervals. It's particularly useful for retirees or those looking for a steady income stream from their investments.

How to Use This Calculator

1. Enter your Initial Investment amount (the lump sum you've invested).
2. Input your desired Monthly Withdrawal amount.
3. Set the Expected Annual Return you anticipate from your investment.
4. Choose the Time Period for which you want to analyze the SWP.
5. Click "Calculate" to see how your investment value changes over time.

Factors to Consider When Planning SWP

• Withdrawal Rate: A sustainable withdrawal rate balances current income needs with preserving capital for the future.
• Investment Returns: Higher returns can sustain higher withdrawal rates, but also come with increased risk.
• Time Horizon: Your investment duration affects the sustainability of your withdrawal plan.
• Tax Implications: SWP withdrawals may have tax consequences depending on your investment type and holding period.

SWP vs. Dividend Option

SWP offers several advantages over dividend-based income:

• Predictable income that you control (unlike variable dividends)
• Potentially better tax efficiency
• Freedom to choose higher-performing growth funds rather than dividend-focused funds
• Flexibility to adjust your withdrawal amount based on your needs