SWP Calculator - Systematic Withdrawal Plan Calculator | Motilal Oswal

SWP Calculator


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          How can a SWP Calculator help you?

          Get a regular source of income when you need it most with an SWP.

          Select the best SWP for your financial needs
          Know what amounts you can withdraw regularly to meet your requirements
          Know how much to invest in a lump sum mutual fund to get a regular source of income from returns.

          An SWP calculator helps you to make informed decisions about how frequently you require income tailored to your needs.

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          SWP gives you the extra cash on hand when needed

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          Save tax with deductions on holdings.

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          SWP Calculator FAQs

          1. What is an SWP?

          An SWP is a systematic withdrawal plan, whereby investors can invest a lump sum in a mutual fund initially, and can withdraw a fixed or variable sum on a regular basis. This withdrawal is made on a set date every month, or quarter, or on a six-monthly basis.

          2. What is the SWP calculator?

          The SWP calculator is a free online tool, available on brokerage and banking online platforms. It automatically computes the returns you will get when you opt for an SWP through a mutual fund. Investors must enter details like the lump sum investment amount, the monthly withdrawal amount, the rate of returns (estimated annually), and the tenure that you want to stay with your investment. The calculator quickly computes amounts you will gain at maturity if you invest in any SWP. It also helps you to know how much to invest as a lump sum to get the withdrawal sums you require.

          3. When can one use an SWP?

          If an investor requires capital on a consistent basis in regular intervals, an SWP is a great way to achieve this. An SWP is useful for a variety of ongoing expense needs from funding marriages, children’s education, repaying EMI and even retirement costs.

          4. How to use an SWP calculator?

          An SWP calculator is a user-friendly digital tool through which you can find out values that are relevant to your SWP investment. You can use it in the following way:

          • Fill in relevant fields with the tenure of investment, total invested amount, and return rate.
          • Then you can fill in an instalment field, based on the intervals you wish to withdraw funds at.
          • After this, the calculator will do its work and automatically let you know what your returns at instalments will be

          5. How can an SWP calculator benefit you?

          SWPs are popular with senior citizens and those who have retired from active working life. These individuals require an assured income and an SWP provides this, typically, as a good income source apart from a regular pension scheme. The calculator shows you exactly how much to invest for your financial requirements to get the instalments you need. Here the benefits of an SWP calculator:

          • Assured monthly income with ROI can be calculated.
          • Setting instalments and knowing maturity amounts (accordingly) are easy to generate.
          • The calculator is convenient to use and easily accessible online at a number of financial portals.
          • You don’t need any special skills to operate the online calculator.

          6. Can I choose the withdrawal amount or is it fixed?

          Withdrawal amounts through an SWP are not fixed, and investors can opt for monthly (or any periodic) withdrawals to suit individual requirements.

          7. Can individuals who are not retirees invest in an SWP?

          Any investor, whether retiree or not, can invest in an SWP. It is simply a mode to invest in mutual funds, so anyone can do so.

          8. When should an investor opt for an SWP scheme?

          An SWP is the perfect solution for retirement expense needs. Several people opt for more traditional schemes in which lump sums are received at retirement. However, these may be prone to tax. An SWP is more tax-efficient and offers a path to get a regular income. There is also the benefit of capital appreciation. Furthermore, an SWP is suitable for many other kinds of investors, from those who have dependents to support, children to raise, fund travel needs, and much more. An SWP, in other words, can help to fund any financial need you may have, currently or in the future.

          9. What are the withdrawal options under an SWP scheme?

          Under an SWP, options for withdrawal are decided by the withdrawal frequency. Investors are permitted to withdraw amounts monthly, quarterly, bi-annual or annually. The withdrawals made may be from the appreciated part of the account or the capital. However, withdrawals may tend to force a negative value on the investment. In such cases, SWP calculators can help you to plan your withdrawals.

          10. Is SWP a good option?

          Depending on the kind of investor you are, an SWP can facilitate you accordingly. An SWP is a good option in phases of volatility in the markets. Investors get to invest in mutual funds, and yet, are able to make systematic withdrawals. Returns are more or less consistent, and an SWP serves as an additional income source with fixed income sources.

          11. What are the tax implications of SWP?

          There are different tax implications based on the mutual funds invested in through an SWP. For schemes that fall under equity, if the period of holding is below a year, gains are computed as STCG, or short-term capital gain. These incur a 15% tax. If the period of holding exceeds a year, then LTCG (long-term capital gains apply and these incur a tax of 10% if these returns are in excess of Rs. 1 lakh per year. In the case of debt-based schemes, if the investor’s period of holding is below 3 years, STCG (short-term capital gains) apply and taxation is levied according to the tax slab of the individual investor. In the event the period of holding is above 3 years, LTCG taxation is applied at 20% (with indexation).

          12. Is SWP good for retirees?

          An SWP gives retirees the benefit of regular income generation in a period in which there is no earning potential. Retired individuals and seniors like the SWP as it offers an additional income with a normal pension plan or any other investment plan they may have opted for. Additionally, retirees save money through certain tax advantages as well.