Systematic Withdrawal Plan: Planning for retirement, know how to meet expenses

Systematic Withdrawal Plan Planning for retirement, know how to meet expenses

Systematic withdrawal plan (SWP) is a very useful way to withdraw money from your corpus, especially during the years of your retirement. So, you know how much amount you can withdraw from your fund. Suppose you are 60 years old and hope that you will live 20 more years. You have saved a total corpus of Rs 1 crore and now you are thinking how much you can withdraw from the corpus invested in your mutual fund after retirement. This will depend on your rate of return of the corpus as the amount of investment will continue to be earned from the market.

How much can you withdraw?

Let’s say the rate of return is 9 percent. If you withdraw 1 lakh per month, you will withdraw about 12 lakh rupees every year and the total earning at the rate of 9 percent in the fund will be 9 lakh rupees annually. In this way, the amount you are earning (Rs 9 lakh annually), you will be withdrawing more than that amount (Rs 12 lakh annually). In this way, despite removing some part of your principal every year, your corpus will last for 16 to 17 years before it ends. This will be due to the fact that the balance corpus will continue to earn from the market.

Your savings are for your consumption

If you want a corpus for your next generation after you, then calculus can be done for this. If you want to leave half of your savings, 50 lakh rupees after the example mentioned earlier, and accordingly, your withdrawal will be Rs 83,000 per month on 9% return. This means that even after withdrawing more than what your fund is earning, you will leave half the amount of your corpus for the next generation.

Some people think that monthly withdrawal in SWP should be from the same amount that the fund is earning. There is no need with financial planning. If you want to corpus for your next generation, it can be planned.


SWP is tax efficient. Invest in the growth option of mutual funds, for debt funds, start SWP after three years of holding because there is a benefit of indexation. Start SWP in equity after one year of holding.

(By Joydeep Sen, Founder,

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