About SWP Calculator & FAQs
What is a Systematic Withdrawal Plan (SWP)?
An SWP is a financial strategy that allows an investor to withdraw a fixed or variable amount from their investments at regular intervals (e.g., monthly). It's commonly used by retirees to generate a steady income stream from their accumulated corpus.
How does Asset Allocation work in this calculator?
Your total corpus is divided into Equity and Debt based on the allocation you set. It's assumed that withdrawals are first made from the Debt portion to protect your Equity investments from short-term market volatility. The portfolio is then rebalanced annually to maintain your desired asset allocation.
What is 'Annual Withdrawal Increase'?
This is the percentage by which your monthly withdrawal amount will increase each year. It's used to account for inflation, ensuring your income keeps pace with the rising cost of living.
How is 'Other Monthly Income' used in the calculation?
Any amount you enter as Other Monthly Income (like rent or a pension) is assumed to be available to cover your expenses first. The calculator will only withdraw the remaining amount needed from your investment corpus. This other income is also projected to grow annually at the rate you specify.
What is Rebalancing?
Rebalancing is the process of realigning the weightings of a portfolio of assets. In this calculator, at the end of each year, the portfolio is adjusted to match your original Equity and Debt allocation percentages. This helps manage risk and maintain your investment strategy over time.
What if my corpus runs out before the desired period?
The calculator will show you exactly how many years your money is projected to last. If there's a shortfall, it will display an alert with an estimate of the additional investment you might need to make your funds last for the entire period.