SWP Calculator
Withdraw monthly from a corpus and see how long it lasts.
Last updated
Your details
Result
- Balance after the period
- $538,615.70
- Total withdrawn
- $1,440,000.00
- Corpus lasted
- 15 yr
- Withdrawal that would last indefinitely
- $6,666.67
How a systematic withdrawal plan works
An SWP does the reverse of a SIP: you start with a corpus, withdraw a fixed amount each month, and whatever remains keeps earning. If the returns exceed the withdrawals, the balance grows despite the payouts. If not, the corpus erodes and eventually depletes.
The dividing line is simple. Monthly returns on the corpus are roughly corpus × annual rate ÷ 12. Withdraw less than that and the capital is untouched; withdraw more and you are consuming principal.
The sequence-of-returns problem
This calculator assumes a steady return. Reality does not cooperate. Withdrawing a fixed amount during a market downturn forces you to sell more units at low prices, permanently shrinking the corpus in a way an averaged projection hides.
Retirement planners often address this by holding two or three years of withdrawals in cash or short-term debt, so market falls need not be crystallised at the worst moment.
Formula & methodology
What this calculator assumes
- Assumes a constant rate of return. Real markets do not deliver this, and withdrawing a fixed sum during a downturn forces selling at low prices — a risk a steady-return model cannot show.
- The withdrawal amount stays flat; it is not increased for inflation, so its real purchasing power falls each year.
- Excludes capital gains tax, exit loads and fund expenses.
Sources
- Brealey, Myers & Allen, Principles of Corporate Finance, 13th edition, McGraw-Hill, 2019 — annuities and drawdown.
Frequently asked questions
What withdrawal rate is safe?
The widely cited rule of thumb is around 4% of the corpus per year, adjusted for inflation. That figure comes from historical US market data and is debated; treat it as a starting point, not a guarantee.
Does the withdrawal amount rise with inflation here?
No — this models a fixed monthly withdrawal. Real spending needs grow, so a plan that just barely survives in nominal terms will fall short in practice.
Year-by-year balance
| Year | Withdrawn to date | Balance |
|---|---|---|
| 1 | $96,000.00 | $983,400.10 |
| 2 | $192,000.00 | $965,422.41 |
| 3 | $288,000.00 | $945,952.59 |
| 4 | $384,000.00 | $924,866.78 |
| 5 | $480,000.00 | $902,030.86 |
| 6 | $576,000.00 | $877,299.57 |
| 7 | $672,000.00 | $850,515.59 |
| 8 | $768,000.00 | $821,508.56 |
| 9 | $864,000.00 | $790,093.95 |
| 10 | $960,000.00 | $756,071.95 |