SWP Calculator

An SWP calculator, or the Systematic Withdrawal Plan Calculator, helps you decide when and how much to withdraw from your Mutual Funds.It shows you the withdrawal amount on a fixed date, the remaining amount, and the SWP return rate. You can use the SWP calculation to streamline your cash flows, estimate how much money you need for retirement, or receive a steady monthly income from investments. It's a valuable tool to calculate the future value of your SWP funds.

An SWP (Systematic Withdrawal Plan) calculator works differently depending on what you want to find, either the withdrawal amount or the duration of withdrawals. Let's see how it works by taking two cases:

Case A: Calculating the Withdrawal Amount

It also helps you calculate the total interest earned on your withdrawal:

• Inputs Required:
  • The amount you initially invested.
  • The expected annual return rate (CAGR).
  • The time you want the withdrawals to last (years or months).
  • The frequency of withdrawals (monthly, quarterly, or annually).
• How It Works: The calculator takes your initial investment and grows it using the expected return rate. Then, it calculates the amount you can withdraw at regular intervals while ensuring your investment lasts for the specified duration.
• Formula: The withdrawal amount is calculated using a reverse version of the investment growth formula. It accounts for regular deductions while adding in the compounding growth of your investment.

Example of a systematic withdrawal plan calculator:

For example, If you invest Rs.10,00,000 at an 8% annual return and withdraw Rs.25,000 monthly through an SWP for 12 months, you'll receive a total of Rs.3,00,000. This includes Rs.69,153 earned as returns, showing how your investment grows even as you withdraw regularly.

This way, your funds are distributed evenly over the chosen period, while also earning returns along the way.

Case B: Calculating SWP Based on the Investment Duration

If you already have a fixed withdrawal amount and want to know how long your investment will last:

• Inputs Required:
  • Your initial investment amount.
  • The expected annual return rate (CAGR).
  • The fixed amount you wish to withdraw each period.
  • The withdrawal frequency (monthly, quarterly, or annually).
• How It Works: The calculator projects how your investment will grow over time with compounding returns while reducing the balance by your fixed withdrawals. It then calculates how many periods it will take for your investment to run out.
• Formula: This is done using a continuous approach, compounding the remaining balance each period, subtracting the withdrawal, and repeating the calculation until the balance hits zero.

Example of systematic withdrawal plan calculator on investment horizon:

For example, if you invest Rs.5,00,000 at an annual return of 8% and withdraw Rs.75,000 Yearly through an SWP, Your investment will last for approximately 10 Yrs. Over this period, you'll withdraw a total of Rs.7,37,935 which includes Rs.2,42,970 earned as returns.

This shows how a steady withdrawal plan works alongside compounding returns to sustain your funds over time.

Here is a step-by-step guide for using the hazel-free systematic withdrawal calculator:

Step 1: Go to the SWP Calculator page on MySIPonline.

Step 2: Enter your Initial Investment Amount.

Step 3: Enter your Withdrawal Amount (monthly, quarterly, or annually).

Step 4: Input the Expected Rate of Return (annual).

Step 5: Set the Investment Tenure (years).

Step 6: Click on the Calculate icon for final results.

Step 7: Review the total withdrawals, total interest earned and final value.

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The following are the benefits of using a systematic withdrawal plan calculator:

1.Accurate Calculations

• Provides correct calculation on the balance remaining after each withdrawal.
• Helps you track how your investment value changes over time.

2.Flexibility and Customization

Allows adjustments to withdrawal amount, investment size, expected return rate and SWP duration.It gives you estimated future values to suit your financial goals.

3.Future Planning

• Shows the final investment value at the end of the SWP period.
• Helps in estimating approx. values of finances and planning future investments effectively.

4.Convenient and Easy to Use

• Simplifies complex calculations, saving time and effort.
• Ideal for both beginners and experienced investors.

5.Informed Decision-Making

• Enables better budgeting and financial planning by providing clear projections.
• Helps you strategize your withdrawals for a stable and predictable income stream.