SWP Calculator
Introducing what is likely the most accurate and realistic SWP (Systematic Withdrawal Plan) calculator available. Designed to offer reliable data points, this tool helps you make informed decisions for more effective retirement planning. For a comprehensive explanation, please refer to the detailed documentation.
Rule
Define what percentage of your corpus you wish to withdraw every year. There are some popular financial rules like 3%, 4% and 5% which you should read on. Ideally, you should plan it at 3%.
Starting corpus
Your invested corpus from which you shall be withdrawing money periodically.
Primary vested duration
If you're investing solely for SWP withdrawals, specify how long you plan to keep the corpus invested before starting the withdrawals. Keeping your investment untouched for at least one year can benefit you tax-wise, as it would qualify for LTCG when you begin withdrawals. For example, if you have ₹1 crore and plan to let it grow for 10 years before starting withdrawals post-retirement, enter 10 years. During this initial period, your invested corpus will continue to grow.
Years to calculate
Specify the duration over which you'd like to withdraw from your corpus. The simulation will project your withdrawals over this period.
Return expectation
Equity returns are rarely linear. Here, specify your expected return, along with the lowest and highest returns anticipated during your withdrawal phase. For a fixed-income debt portfolio with stable returns, you can set the lowest and highest return as the same. For example, if you expect a 12% return over the long term in an equity portfolio, returns might fluctuate between -17% and 35%, centered around your expected value.
Inflation
Estimate the average annual inflation rate over your withdrawal phase. This rate affects the real value of your returns, as rising costs over time reduce purchasing power. Setting an inflation rate provides a more accurate view of how your investments will perform relative to future expenses.
Lifestyle inflation reflects the anticipated increase in personal spending over time as income grows or lifestyle changes. For example, if you expect to increase spending on travel or luxury items each year, you might set a positive lifestyle inflation rate. Factoring this in will help align your withdrawal strategy with future lifestyle needs.