Working, benefits and calculation of an SWP calculator

Are you interested in generating a steady income stream from your investments without worrying about market fluctuations? If so, you may want to consider setting up a systematic withdrawal plan (SWP).

An SWP is an investment plan that allows you to withdraw a predetermined amount of money from your mutual fund or exchange-traded fund (ETF) regularly, typically monthly, quarterly, or annually. This can be a useful way to generate retirement or supplement your regular income.

To calculate an SWP, you can use an SWP calculator. The SWP calculator helps you determine the amount of money you can withdraw at regular intervals based on your investment portfolio, expected returns, and the duration of the SWP.

Benefits of an SWP calculator

There are several benefits to setting up an SWP, including:

  • Regular income: By setting up an SWP, you can ensure that you have a regular source of income. This can be particularly useful if you’re retired and no longer receiving a salary.
  • Flexibility: Most SWPs allow you to choose the amount of money you want to withdraw and the frequency of withdrawals. This means you can tailor the plan to your needs and financial situation.
  • Diversification: If you invest in multiple mutual funds or ETFs, you can set up SWPs for each. sThis can help you diversify your income sources and reduce your overall risk.
  • Tax benefits: Depending on your country and local laws, SWP withdrawals may be taxed lower than regular income. Be sure to consult a tax professional to understand your specific situation.

How to calculate an SWP?

To set up an SWP, you must first decide how much money you want to withdraw and how frequently you want to take it. Several criteria must be considered when calculating the amount of money you can remove, including:

A = PMT * ((1 + r/n)^(nt) – 1) / (r/n)


A represents the final value of the investment

PMT represents the amount withdrawn at each period

n represents the number of compounding periods per year

r represents for the expected annual rate of return

t represents the total number of periods for which the money is invested.

The total amount that can be withdrawn over the chosen duration can be calculated by multiplying the withdrawal amount by the number of intervals in the chosen duration.

For example, suppose an investor has invested Rs. 10,00,000 in a mutual fund and wants to withdraw Rs. 5,000 per month as an SWP for 5 years with an expected rate of return of 8% per annum.

Then, total investment will be Rs 10,00,000, and the total withdrawal in 5 years will be Rs 3,00,000. Thus, the final value will stand at Rs 11,04,605


An SWP is a great investment strategy that provides a steady source of income during retirement. It is a tax-efficient strategy that helps you manage your cash flow and budget your expenses accordingly. To calculate SWP, you can use an SWP calculator that enables you to determine the amount of money you can withdraw at regular intervals based on your investment portfolio, expected returns, and the duration of the SWP.

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