A Systematic Withdrawal Plan (SWP) allows investors to withdraw a fixed amount from their investments (mutual funds, FDs, etc.) at regular intervals. This is particularly useful for retirees who needs monthly income or those looking to generate a constant income stream from their investments.
The SWP calculator helps you determine how long your investment corpus will last based on your withdrawal amount, expected rate of return, and inflation rate.
For example, If you invest ₹10,00,000 and withdraw ₹5,000 monthly for 10 years at an 8% annual return with a 6% inflation rate, the calculator will show how long your corpus will last and how much you will withdraw in total and some other details also. It also adjusts your withdrawals for inflation, ensuring you maintain your purchasing power.
Most SWP calculators ignore inflation, leading to financial loss later on. This calculator considers inflation, helping you plan better. Inflation lowers purchasing power over time. For example, ₹5,000 today may not have the same value in 10 years. This calculator adjusts your withdrawals for inflation, ensuring you maintain your purchasing power.
By using this calculator, you can make informed decisions about your withdrawals, ensuring that your investments last longer and provide the income you need throughout your retirement. It helps you understand how inflation affects your withdrawals and how to adjust your strategy accordingly.
What appears as a comfortable ₹20,000 monthly income today may not sufficient in 10 years due to inflation. For instance, with a 6% inflation rate, ₹20,000 today will only be worth ₹11,200 in 10 years. This means you would need to withdraw more than ₹20,000 to maintain the same purchasing power.