How Long Will Money Last With an SWP? Fixed and Rising Withdrawals
Published
How long will money last with an SWP? ₹30 lakh paying ₹25,000 a month, fixed or rising 6% a year, and why a loss in the early years hurts more.
How long will money last with an SWP? It depends on 4 things: how much you start with, how much you take out, whether that amount rises, and the return. Take ₹30 lakh at an assumed 8% a year. A fixed ₹25,000 a month lasts the full 15 years and leaves about ₹10,22,046. A withdrawal that starts at ₹25,000 and rises 6% a year runs short in month 137.
- An SWP pays you by selling fund units. Part of each payment can be your own money coming back.
- ₹30 lakh paying a fixed ₹25,000 a month lasts 15 years at 8% a year and leaves about ₹10,22,046.
- If the withdrawal rises 6% a year, 136 payments are made in full, and month 137 pays only ₹29,172 of ₹47,457.
- The order of returns matters. A loss in the first year hurts more when money is coming out.
Try your own numbers
Type your own savings, monthly withdrawal and return into the SWP calculator to see how many years the money lasts.
Open the calculatorWhat is an SWP?
An SWP, or systematic withdrawal plan, sells some of your mutual fund units on a set date, often every month. The money goes to your bank account. The rest stays invested.
A regular payment does not mean the fund earned that amount. If the fund earns less than you take out, part of each payment is your own money coming back. The balance then shrinks.
How long will money last? Fixed and rising withdrawals
Take ₹30 lakh, an assumed return of 8% a year and a period of 15 years. Each withdrawal is paid at the start of its month. Tax, exit loads and fund charges are left out.
| Measure | Fixed ₹25,000 | ₹25,000 rising 6% a year |
|---|---|---|
| Payments made in full | 180 of 180 | 136 of 180 |
| First short month | None | Month 137 |
| Total paid out | ₹45,00,000 | ₹47,10,495 |
| Balance after 15 years | ₹10,22,046 | ₹0 |
In month 137 the rising plan asks for ₹47,457, but only ₹29,172 is left. That month is short by ₹18,285, and nothing is left after it.
The fixed plan lasts longer because its later payments are smaller. But rising prices shrink what ₹25,000 can buy each year. So the fixed plan pays less in real terms. Comparing only the end balance misses that.
The most you can take, and the money you need
The same sum can be worked backwards. To last the full 15 years with a 6% yearly rise, ₹30 lakh supports a first withdrawal of about ₹19,610 a month. To start at ₹25,000 and rise 6% a year for 15 years, you would need about ₹38,24,633.
Why the order of returns matters
A steady 8% every year hides how real markets move. Here is a 2-year example. You start with ₹10 lakh and take out ₹1 lakh at the end of each year. The 2 yearly returns are −20% and +25%.
| Order of returns | After year 1 | After year 2 |
|---|---|---|
| −20%, then +25% | ₹7,00,000 | ₹7,75,000 |
| +25%, then −20% | ₹11,50,000 | ₹8,20,000 |
Without withdrawals, both orders end at ₹10 lakh. With withdrawals, the loss-first path ends ₹45,000 lower. After the early loss, ₹1 lakh came out of a smaller balance, so less money was there for the +25% year. A fall like this from a high point is called a .
Read a short month the right way
A last part payment is not another full month. A clear result shows the number of full payments, the first short month, and what was actually paid in it.
Money left at the end of 15 years means those 15 years were paid for under these assumptions. It does not mean the payments can go on forever.
Is an SWP withdrawal taxable?
Each SWP payment sells units. Tax falls on the of the units sold, not on the whole payment. The gain depends on what those units cost and how long they were held. An exit load can also apply to units sold early. Read the fund's own documents before you act.
Test your own plan on the SWP calculator
Type your own starting amount, monthly withdrawal and yearly rise. The SWP calculator counts the months paid in full, names the first short month, and works out the most you can take. Then try a lower return and a longer period.
Open the calculatorSources
If a figure here disagrees with its source, trust the source.
Make it concrete
Retirement calculator
Work back from your spending to the money you need when withdrawals begin.
Open →Drawdown and recovery arithmetic
Why a bigger loss needs an even bigger gain to recover.
Open →How SIP investing works
What a fund unit is, and why its price changes how many units a payment needs.
Open →Frequently asked
How long will ₹30 lakh last with ₹25,000 a month?
At an assumed 8% a year with each payment at the start of its month, a fixed ₹25,000 lasts the full 15 years and leaves about ₹10,22,046. If the amount rises 6% a year, month 137 is the first short month.
Is an SWP a guaranteed monthly income?
No. An SWP sells fund units. If returns are lower than assumed, or the withdrawal is too large, the money can run out.
Should my SWP amount rise with inflation?
A rising amount keeps up with prices but uses money faster. A fixed amount lasts longer but buys less each year. Compare both before you choose.
What does a zero balance on an SWP calculator mean?
It means the money ran out under those assumptions. Look for the first month that could not be paid in full, and what was paid in it.
Read next
All articles →
FII LTCG Tax: Has SEBI Asked to Remove It?
Reuters says SEBI has recommended removing LTCG tax for foreign investors. It is a reported idea, not a tax change.
SIP Calculator Formula: Why Two Answers Differ
The 2 hidden settings in every SIP calculator, and how they turn one ₹10,000 SIP into 4 different totals.
Step Up SIP vs Regular SIP: The Real Difference
A 10% step-up SIP ends ₹10.29 lakh higher, but ₹7.12 lakh of that is money you paid in yourself.A drawdown is the fall from a previous peak to a subsequent low, expressed as a percentage of that peak.
Read moreA capital gain is the gain from selling an asset for more than its eligible cost.
Read more