EXPECTED RETURNS 15 %
TIME PERIOD 5 Years
If you are a regular investor in mutual funds, you must be familiar with terms like mutual fund SWP calculator and systematic withdrawal plan calculator India. The mutual fund SWP calculator helps you to work out a model how you can profitably draw down your corpus in a systematic manner. Let us take a detailed look at the systematic withdrawal plan calculator India.
Before we get into the nuances of the systematic withdrawal plan calculator or SWP calculator, let us start by looking at what this concept of systematic withdrawal plan or an SWP is all about. This is a structured drawdown plan offered by mutual Funds, where you withdraw a fixed amount periodically from the scheme. When you draw a fixed small amount from the corpus, it is better than withdrawing a lump sum at one go as the remaining funds in the mutual fund continue to earn returns.
Normally, if you are retired and plan to live out of your accumulated corpus, then SWP helps to fulfil your monthly cash flow needs. It is most suitable during retirement when you actually need funds for your sustenance. You can look at the SWP as the reverse of a SIP. In an SIP you invest in a phased manner while in an SWP you withdraw in a phased manner. That way, you can draw down your entire corpus over 20-25 years post retirement and not worry about just taking out the returns. Also, the SWP is more tax efficient as the tax is only imposed on returns and SWP has a large principal component too.
Let us get down to understand how to actually calculate the SWP amount using the systematic withdrawal plan calculator or SWP calculator. It is quite simple and you just need to follow certain simple steps. Let us outline the key steps for the use of the systematic withdrawal plan calculator or SWP calculator.
What is the use of SWP Calculator?
The systematic withdrawal plan calculator or SWP calculator is used to work out how you can withdraw from your corpus (typically retirement corpus) over a period of time at the time making money work hard for you. The systematic withdrawal plan calculator or SWP calculator asks for some basic inputs from your side and the calculator gives the output of your choice.
Can I choose the withdrawal amount or is it fixed?
In the systematic withdrawal plan calculator or SWP calculator you can choose the withdrawal amount based on how much you want to take out on a periodic basis depending on your cash requirements. That is entirely at your withdrawal.
When to use SWP?
The systematic withdrawal plan or SWP is used when you want to gradually and systematically yet productively draw down from a corpus. Typically, when you are retired and want to live of your corpus. You can use an SWP. This can be calculated by using a simple systematic withdrawal plan calculator or SWP calculator online.
Is an Existing SIP compulsory for SWP?
Not at all. As you would be able to see when you use a systematic withdrawal plan calculator or SWP calculator, the SWP is done on a starting corpus, which is a lump sum amount. Typically, this is built through SIP. For example, an investor would create a corpus of funds by retirement using SIP and then gradually draw down the corpus using SWP. Such nuances can be easily witnessed using the systematic withdrawal plan calculator or SWP calculator.
Who is eligible for SWP?
There is no eligibility for SWP. Anyone who has a corpus and wants to draw down the corpus over a period of say 15-20 years can opt for the SWP. The systematic withdrawal plan calculator or SWP calculator will give you the exact information on the working of the SWP.
How to invest in SWP?
SWP is not a product, but a structure. Like you select SIP as an option while investing in a mutual fund, you can select SWP as an option to draw down your corpus. The mutual fund AMC offers this option to the investors. You can do a complete calculation of the draw down using the systematic withdrawal plan calculator or SWP calculator online.