A Systematic Withdrawal Plan (SWP) is a mutual fund feature that lets you withdraw a fixed amount at regular intervals while keeping the remaining investment growing. It’s a great option for creating a steady income stream, making it ideal for retirees or anyone seeking financial flexibility.
The SWP formula calculates your remaining corpus after each withdrawal:
Remaining Corpus = (Corpus - Withdrawal) × (1 +
monthly_return)
Where:
monthly_return = Annual return divided by 12
Note: This is recalculated monthly until the corpus is
exhausted.
Ensures predictable cash flow from your investments.
Only the withdrawn amount is taxed, not the entire corpus.
Allows your principal to grow while withdrawing funds.
Adjust frequency and amount to suit your needs.