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How to use the swp calculator
- 1Enter the corpus you are starting with.
- 2Enter the monthly amount you want to withdraw.
- 3Set the return you expect the remaining balance to earn.
- 4Read how long it lasts — and compare your withdrawal against the sustainable figure.
The number that matters is not the closing balance
Most withdrawal calculators tell you what is left after a period you choose. That is the wrong question. The one you actually care about is whether the money outlasts you, and the answer is governed by a single comparison: is your monthly withdrawal above or below what the corpus earns each month?
Below it, and the balance grows despite the withdrawals — the plan runs forever. Above it, and you are eating capital, and the depletion accelerates because each withdrawal reduces the base that generates the next month's return. There is no gentle middle: the corpus either survives indefinitely or empties on a date you can calculate.
So this calculator reports the sustainable withdrawal — the corpus multiplied by the monthly return — alongside your figure, and tells you the month the money runs out if it does. On a ₹1 crore corpus at 9%, that threshold is ₹75,000 a month. Withdraw ₹70,000 and it lasts forever. Withdraw ₹85,000 and it is gone in about nineteen years.
Why an SWP beats selling units when you need cash
The alternative to a withdrawal plan is redeeming units whenever money is needed, and it is worse for two reasons that are easy to miss.
The first is behavioural. Ad-hoc redemption invites you to sell when markets have fallen, because that is when money feels tight, and selling into a fall converts a paper loss into a real one. A standing instruction removes the decision.
The second is tax. Each SWP redemption is treated as a partial sale, and only the gain component is taxable, not the whole amount withdrawn. Withdrawing ₹50,000 from a fund that has grown 20% means only about ₹8,300 of it is gain. Compare that with the interest on a fixed deposit, where every rupee of interest is taxable as income at your slab rate. For a retiree drawing a monthly income, this difference is substantial and recurring.
Sequence risk: the thing this model cannot show
This calculator assumes a constant return, and for a withdrawal plan that assumption hides a genuine danger in a way it does not for a SIP.
When you are accumulating, a bad early year is almost a gift — you buy more units cheaply and the recovery works in your favour. When you are withdrawing, a bad early year is the opposite. You are selling units at depressed prices to fund your withdrawal, so fewer units remain to participate in the recovery. Two retirees with identical average returns over twenty years can end up in completely different places purely because of the order those returns arrived in. That is sequence-of-returns risk, and it is why retirement drawdown is harder than accumulation.
The conventional defence is to keep two to three years of planned withdrawals in something that does not fall — a liquid fund or short-term deposit — and draw from that during market falls, leaving the equity portion untouched to recover. No constant-return calculator, this one included, can model that; it is a reason to withdraw somewhat below the sustainable figure rather than exactly at it.
Setting a realistic withdrawal rate
The widely-quoted 4% rule comes from US research on a thirty-year retirement funded by a stock-and-bond portfolio, and it is a rule about the first year's withdrawal, subsequently raised with inflation. It is a starting point for thinking, not a law, and it was derived in a different market with different inflation and different tax treatment.
The rate this calculator shows as sustainable is a different and simpler idea: the withdrawal that exactly consumes the return, leaving the nominal capital intact forever. It ignores inflation, so a withdrawal that is sustainable in rupees will still buy less every year. If you want the purchasing power to hold, the honest number is closer to the return minus inflation — perhaps 4–5% of the corpus a year rather than 9%.
That is a much smaller number than most people expect, and it is the single most useful thing to learn before retiring. Run both figures here: the nominal sustainable withdrawal, and one calculated at your expected return minus your expected inflation.
Frequently asked questions
How much can I withdraw without the corpus running out?
The corpus multiplied by the monthly return — shown here as the sustainable withdrawal. At that rate you spend only the growth and the nominal capital stays intact. Anything above it eats capital, and the depletion accelerates.
Is an SWP more tax-efficient than a fixed deposit?
Usually, yes. Each SWP redemption is a partial sale, so only the gain component is taxable rather than the whole amount. Fixed deposit interest is taxable in full at your slab rate every year.
Does this account for inflation?
No. The sustainable figure keeps the capital intact in rupees, not in purchasing power. For an inflation-adjusted answer, run it again using your expected return minus your expected inflation.
What is sequence-of-returns risk?
The risk that poor returns arrive early in your withdrawal period. You end up selling units cheaply to fund withdrawals, leaving fewer to benefit from the recovery. Two retirees with the same average return can finish in very different places depending on the order it arrived in.
Should I withdraw exactly the sustainable amount?
Usually a little less. A constant-return model cannot capture market falls, and keeping two to three years of withdrawals in a liquid fund to draw from during downturns is the standard defence.
Are my figures sent anywhere?
No. Everything runs in this browser tab; nothing is uploaded.