SWP Calculator

A systematic withdrawal plan pulls a fixed amount out of an invested corpus every month while the remainder keeps earning. The question that matters is not what the balance is at the end — it is whether the money lasts at all.

Two withdrawal rates, one corpus

Start with 10,00,000 invested at an assumed 8% and run it for 15 years.

• Withdrawing 8,000 a month: the corpus survives. Total withdrawn is 14,40,000 and 5,38,615.70 is still invested at the end.
• Withdrawing 12,000 a month: the corpus is exhausted in month 123 — year 11, month 3. Total withdrawn is 14,64,536.28, and the last payment is a partial one.

An extra 4,000 a month, a 50% larger draw, is the difference between a plan that funds itself indefinitely and one that stops four years short. The result names the exhaustion month explicitly rather than leaving you to infer it from a zero balance.

How the simulation runs

This is not a closed-form formula. The tool steps through one month at a time:

1. 1Credit the month's growth to the balance at the monthly rate.
2. 2Withdraw the smaller of your requested amount and whatever balance remains.
3. 3Stop and record the month if the balance reaches zero.

Capping the withdrawal at the available balance matters. A model that simply subtracts the full amount every month will report a plausible-looking negative balance and will overstate the total you received, because it counts money that was never there to take.

Sequence risk is the assumption doing the most damage

The 8% return is credited evenly, one twelfth at a time, every month for fifteen years. Real portfolios deliver returns in lumps, and a withdrawal plan is unusually sensitive to when the bad ones arrive. Selling units to fund a withdrawal during a drawdown permanently removes capital that would otherwise have participated in the recovery. Two portfolios with identical average returns can therefore produce very different exhaustion dates, and the earlier the poor years fall, the worse the outcome.

A projection that survives comfortably at a flat 8% may not survive a real sequence with the same average. Test a lower rate before relying on the result.

The withdrawal never rises, and that is the catch

The monthly amount is held constant for the whole term. In a world with any inflation at all, that is a shrinking income. Fifteen years at 6% inflation cuts the purchasing power of a fixed payment to under half of what it was at the start. If you intend the withdrawal to hold its real value, you need a larger corpus than this page suggests, or a plan that increases the draw annually — which the tool has no field for.

Also excluded: exit loads on redeemed units, capital gains tax on each withdrawal, and any dividend or interest paid out separately.

Other pages worth opening

To build the corpus in the first place, use the SIP calculator. To size the corpus a retirement actually needs, use the retirement calculator. To see how badly a fixed withdrawal erodes over time, run the amount through the inflation calculator.