SWP Calculator

How to Use the SWP Calculator

1. Choose what you want to find out: how long a corpus may last, how much you could withdraw, or what corpus you need.
2. Enter the amounts, how often you withdraw, and a return to assume.
3. Optionally add a yearly increase in the withdrawal.
4. Read the estimate and the lower and higher return scenarios. They update as you change any value.

Reading the Estimate

One return is not an answer. How long a corpus lasts can change a lot with the return you assume. The scenarios show the same plan at a lower and a higher return so you can see how much depends on that one number.

Growth is estimated, withdrawals are yours. The total withdrawn is what you take out. The estimated growth is what the assumed return would add, so it moves whenever the assumption does.

"How much can I withdraw?" and "What corpus do I need?" use the corpus up by design. They solve for a plan that reaches zero at the end of the period you chose. They do not leave anything behind.

Assumptions and What Is Not Included

• The return is an assumption you enter and it is applied as the same rate every year. Real returns vary, can be lower than assumed and can be negative. Poor years early in a plan can use a corpus up sooner than a constant return suggests: this sequence-of-returns risk is not modeled.
• The annual return is treated as an effective annual rate: with no withdrawals the corpus would grow by exactly that percentage over a year, whatever your withdrawal frequency. Other calculators, including the SIP Calculator on this site, can divide the annual rate by the number of periods instead, so figures can differ slightly.
• Each withdrawal is taken at the start of its period, before that period's growth.
• The yearly increase is a percentage you choose, applied once a year to the withdrawal. It is not a prediction of inflation.
• Taxes (including tax on gains), fund charges, exit loads, fees and inflation are not modeled, and neither are any fund's actual units or prices.
• Amounts are not rounded in the calculation. A real withdrawal is rounded, so figures can differ a little.
• A plan is modeled for at most 50 years, and the return can be 0% to 30%.

These are mathematical scenarios for understanding, not forecasts, guarantees or financial advice, and ToolZen Hub does not recommend any investment. Investments are subject to market risk. See the disclaimer.

Example

Take a corpus of ₹1,00,00,000, withdrawals of ₹80,000 a month and an assumed return of 8% a year. The corpus is estimated to cover 250 withdrawals in full (20 years 10 months). At 6% or 10% instead, it is estimated to last 15 years 11 months or 47 years 2 months. To use the same corpus up over 25 years, the first withdrawal would be about ₹74,859 a month. And ₹80,000 a month for 25 years would need a starting corpus of about ₹1,06,86,635.

How the Estimate Is Calculated

Each period, the withdrawal is taken first and what is left grows by one period of the assumed return:

balance = (balance − withdrawal) × (1 + i)

i is (1 + the annual return) raised to 1 divided by the number of withdrawals a year, minus 1. With a yearly increase, the withdrawal is multiplied by (1 + the increase) once at the start of each year. To find how long a corpus lasts, the calculator repeats this month by month (or quarter by quarter, or year by year) until a withdrawal can no longer be paid in full: the part-paid last withdrawal is counted in the total withdrawn but not as time.

To find a withdrawal or a corpus for a chosen number of years, the calculator adds up the value today of every withdrawal, each discounted by the assumed return. The corpus needed is the first withdrawal multiplied by that total, and the first withdrawal a corpus supports is the corpus divided by it.

SWP Calculator FAQ