A Systematic Withdrawal Plan is a financial strategy where you invest a lump sum amount and set up regular withdrawals (typically monthly) to generate a steady income stream. The remaining corpus continues to be invested and potentially grows over time, extending the life of your investment.

Unlike pensions or annuities which typically provide fixed payments for life, an SWP offers more flexibility in withdrawal amounts and investment choices. With SWP, you maintain control over your corpus and can adjust withdrawal amounts as needed, but there's no guarantee the funds will last for your lifetime unless the returns consistently exceed your withdrawal rate.

Lower than expected returns will reduce the duration your corpus will last. Our SWP calculator assumes a constant return rate, but in reality, market returns fluctuate. To be conservative, consider using a return rate that's 1-2% lower than historical averages when planning, or periodically reassess your withdrawal strategy based on actual performance.

You can extend the duration of your SWP by: 1) Reducing your monthly withdrawal amount, 2) Investing more initially or adding to your corpus periodically, 3) Seeking investments with higher potential returns (though this typically involves higher risk), or 4) Using a dynamic withdrawal strategy where you reduce withdrawals during market downturns.

For SWP from mutual funds, only the gain portion of each withdrawal is typically taxable. Short-term capital gains (held less than one year) are taxed at your income tax slab rate, while long-term capital gains (held more than one year) may receive preferential tax treatment depending on your jurisdiction. Consult a tax advisor for specific guidance based on your location and investment type.