Plan your monthly income from mutual fund corpus in retirement. Find how long your savings last — and what corpus you need for a specific monthly withdrawal.
How much corpus do you need for a given monthly withdrawal forever?
A Systematic Withdrawal Plan (SWP) is the retirement-income mirror of SIP. While SIP helps you build a corpus by investing regularly, SWP helps you draw down that corpus by withdrawing regularly. It is the preferred strategy for retirees in India who want a steady monthly income without selling their entire mutual fund investment at once.
Fixed deposits offer predictable income but surrender most of the corpus to inflation over 20+ years. A well-structured SWP from a balanced or hybrid mutual fund can deliver higher net income after tax while keeping the corpus growing in real terms.
| Feature | SWP (Hybrid Fund) | Bank FD |
|---|---|---|
| Expected Return | 8-10% | 6.5-7.5% |
| Tax on Income (30% slab) | 12.5% LTCG (only on gains) | 30% on full interest |
| Inflation Protection | High (equity component) | Low |
| Corpus Longevity | Can grow in real terms | Depletes at interest rate |
| Flexibility | Modify anytime | Penalty on premature exit |
The classic "4% withdrawal rule" (from US research) suggests you can withdraw 4% of your corpus annually without depleting it over 30 years. For India, given higher inflation (typically 6-7%), a safer rate is 3-3.5% annually — or roughly 0.25-0.3% monthly. On a corpus of ₹1 crore, this translates to ₹25,000-30,000/month as a sustainable withdrawal.
Balanced Advantage Funds (BAFs) and Hybrid Aggressive Funds are popular SWP vehicles because they dynamically allocate between equity and debt. This provides both growth (to offset inflation) and stability (to avoid large drawdowns that could disrupt your withdrawal plan).
Absolutely. Many Indian retirees use SWP to supplement pension or NPS income. The strategy is to cover essential expenses through pension and use SWP corpus for discretionary expenses or healthcare — this way, you only withdraw what you need, preserving corpus for longer.
Most AMCs allow SWP from any amount, but for practical sustainability, you need at least ₹10-15 lakh to generate a meaningful monthly income of ₹5,000-8,000. For ₹25,000-50,000/month income, target a corpus of ₹40-80 lakh in a fund earning 8% annually.
A Systematic Withdrawal Plan (SWP) is the retirement equivalent of SIP — instead of investing monthly, you withdraw monthly. With the right corpus and return rate, you can withdraw forever without depleting principal. This calculator shows exactly how long your corpus lasts at any withdrawal amount.
At 4% annual withdrawal rate (conservative): 1 Cr → ₹33,333/month. At 8% (equals portfolio return): ₹66,667/month from ₹1 Cr — corpus never depletes. Above 8% withdrawal rate, corpus depletes over time.
For equity mutual funds: LTCG (held >1 year) taxed at 12.5% above ₹1.25L/year. STCG (held <1 year) taxed at 20%. For debt funds: gains taxed at slab rate. Structure SWP to stay within annual LTCG exemption limit.
Balanced Advantage Funds (BAF) or conservative hybrid funds are ideal — they dynamically manage equity-debt allocation, reducing volatility. Avoid pure equity funds — market crashes during SWP withdrawals can permanently impair corpus.
Yes. SWP is completely flexible — increase, decrease, pause, or stop any time. Changes typically take 5–7 working days. This flexibility is a major advantage over annuities.
For a 25-year SWP at 8% return, you need approximately ₹20,000 monthly × 25 years × adjustment factor. A corpus of ₹40–50L supports ₹25,000/month sustainably. For ₹50,000/month sustainably, you need ₹75L+.
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