How this calculator works
A systematic withdrawal plan (SWP) sells a fixed amount from your investments every month. The rest stays invested and keeps earning. The calculator follows the corpus month by month: it grows at your expected return (annual rate ÷ 12), then the withdrawal is taken out. Once a year, the withdrawal rises by the increase you choose.
Each year: withdrawal = withdrawal × (1 + increase)
It also searches for the sustainable withdrawal: the highest starting monthly amount that, rising each year as you specified, lasts exactly the number of years you selected.
Why the yearly increase matters so much
Take a corpus of ₹1,00,00,000 earning 8% a year. Withdrawing a flat ₹50,000 a month (6% of the corpus a year) never exhausts it. The corpus actually keeps growing, to about ₹3,48,39,324 after 30 years, because the withdrawal is smaller than the monthly return. But a flat withdrawal loses spending power every year. Raise it by 5% a year to keep up with prices and the same corpus lasts about 24 years 5 months; at 6% a year, about 21 years 6 months.
This is why retirement planners talk about withdrawal rates rather than monthly amounts. A first-year withdrawal of 3% to 4% of the corpus, rising with inflation, has historically been sustainable over long retirements in many markets; 6% or more usually is not. Our FIRE and corpus maths guide works through the numbers.
What a steady-return calculator cannot show
Real returns arrive unevenly. If markets fall sharply in the first few years of withdrawals, you are forced to sell more units at low prices, and the corpus may never recover, even if the long-run average return is the same. This is sequence-of-returns risk, explained with simulations in our SWP and sequence risk article. Common defences are keeping two to three years of withdrawals in debt funds or deposits, and trimming withdrawals after bad years.
How SWP withdrawals are taxed
Each withdrawal is a sale of units, so only the gain on the units sold is taxed, not the whole withdrawal. For equity funds held over 12 months, long-term gains above ₹1,25,000 a year are taxed at 12.5%; within 12 months, at 20%. For debt funds bought on or after 1 April 2023, gains are taxed at your slab rate whatever the holding period. In the early years most of each withdrawal is your own capital, so the tax is usually small. See the capital gains guide.
Frequently asked questions
What is a safe withdrawal rate in India?
There is no guaranteed safe rate. Because Indian inflation has been higher than in the US, where the 4% rule was studied, many planners suggest starting at 3% to 3.5% of the corpus for early retirees, and up to about 4% to 5% for those retiring in their sixties with other income such as a pension.
Is an SWP better than the IDCW (dividend) option?
An SWP lets you choose the amount and date, and only the gain portion of each withdrawal is taxed. IDCW payouts are decided by the fund house, can vary or stop, and are taxed in full at your slab rate. For regular income, an SWP from the growth option is usually more flexible and tax-efficient.
Which fund should I use for an SWP?
Retirees often use a balanced advantage, conservative hybrid or multi-asset fund, or keep a debt bucket for the next few years of withdrawals and an equity bucket for later years. The right mix depends on your age, other income and comfort with volatility.
What happens if I withdraw more than the fund earns?
The corpus shrinks every month and the shrinking accelerates, because a smaller balance earns less. The table shows the year in which the balance runs out.
Related reading
- SWP for retirement income and sequence risk
- FIRE in India: the corpus maths
- Retirement & FIRE calculator
- Debt funds vs fixed deposits after tax
This calculator is for education and planning. Results depend entirely on the assumptions you enter and are not a forecast, a guarantee or investment advice. Everything runs in your browser; nothing you enter is sent to us. Read our disclaimer. Built and checked by Pradeep Rawal.