You've built a ₹1 Crore+ corpus through years of SIP. Now what? SWP (Systematic Withdrawal Plan) converts your corpus into a monthly income — more tax-efficiently than FD interest.
SWP is the mirror image of SIP. Instead of investing monthly, you withdraw a fixed amount monthly from your mutual fund corpus. The remaining amount stays invested and continues earning returns.
Example: ₹1 Crore corpus in a balanced fund. Set up SWP of ₹50,000/month. Fund earns 8-10% annually. If fund earns 9.6% annually = ₹8,000/month returns. You withdraw ₹50,000 but only ₹42,000 comes from principal. The corpus slowly depletes over 35+ years.
| Factor | SWP (Equity MF) | FD Interest |
|---|---|---|
| Tax on ₹1L/month income | 10% LTCG on GAINS only | Full 30% on entire ₹1L |
| Annual tax (30% bracket) | ~₹30,000-60,000/year | ₹3,60,000/year |
| Inflation protection | Yes — corpus keeps growing | No — fixed FD rate |
| Principal safety | Market linked — can fall | 100% guaranteed |
For retirement income, most advisors recommend: 50% in balanced/hybrid fund with SWP + 50% in FD/debt. This gives stability (FD) + inflation protection + tax efficiency (SWP).
Calculate SWP: SWP Calculator | Retirement SIP Calculator
Follow us for daily investment tips:
⚠️ This article is for educational purposes only. Not investment advice. Contact: teamsipcalculators.in@gmail.com