Mutual Fund SWP Calculator
Plan regular, tax-efficient monthly income from your mutual fund portfolio. Simulate portfolio longevity, total withdrawals, annual step-up hikes, and remaining capital balance.
SWP Investment Parameters
100% Private in Browser RAM🛡️ Safe Withdrawal Rate (SWR) Check
Your initial withdrawal rate is 8.4%. For equity-heavy funds, staying between 6% to 8% allows comfortable indefinite compounding.
Year-by-Year SWP Cashflow Ledger
Annual breakdown of interest generated, cumulative payouts withdrawn, and ending portfolio capital.
| Year | Opening Balance (₹) | Annual Interest Earned (₹) | Annual Withdrawn (₹) | Closing Balance (₹) |
|---|
⚖️ SWP vs Fixed Deposit (FD) Taxation
- 100% Tax on FD Interest: Every rupee of bank FD interest is added to your income and taxed at your marginal slab rate (up to 30% + surcharge).
- Only Capital Gains Taxed in SWP: Each monthly SWP payout is treated as a partial redemption of units. The majority of early payouts represent original capital (tax-free).
- Budget 2024 LTCG Exemption: In equity mutual funds held over 12 months, long-term capital gains are tax-free up to ₹1.25 Lakh per financial year, and taxed at only 12.5% beyond that.
- No TDS for Resident Indians: Mutual funds do not deduct TDS on SWP redemptions for resident Indian investors (unlike bank FDs which deduct 10% TDS under Sec 194A).
💡 Golden Rules for a Never-Ending SWP
- The 6% Rule in India: If your expected portfolio return is 10–12%, limiting your starting withdrawal to 6% ensures your capital continues to grow faster than inflation.
- Maintain a 1–2 Year Cash Buffer: Keep 12 to 24 months of living expenses in an arbitrage or liquid fund to avoid selling equity units during temporary market corrections.
- Hybrid / Balanced Advantage Funds: Dynamic asset allocation funds naturally mitigate market volatility, making them the most popular choice for long-term SWP investors.
- Review Annually: Step-up your monthly withdrawal by 4% to 6% only in years where the markets have performed normally or positively.
Frequently Asked Questions
What happens if market returns fall below my withdrawal rate?
If your annual portfolio return is less than your withdrawal percentage, your principal corpus will begin to deplete. Our calculator flags this condition immediately with a "Corpus Depleting" badge and calculates the exact year your money might run out.
How is the monthly return calculated in this tool?
The tool uses compound monthly interest where each month's beginning balance earns returns at the effective monthly rate before the scheduled monthly withdrawal is deducted.
Can I start an SWP in direct plans of mutual funds?
Yes. Direct plans save between 0.5% and 1.2% in annual expense ratios compared to regular plans. Over a 20-year retirement, choosing a direct mutual fund plan can add several lakhs to your final corpus balance.