# Retirement Planning

### SWP XIRR Calculator

Enter your corpus, monthly withdrawal, and remaining value — check returns during withdrawals

How Long Will My Money Last? SIP to Target SWP

- **Initial Corpus (₹)** ₹50.00 L
- **Monthly Withdrawal (₹)** 
- **Expected Return (%)** 
- **Future Target Withdrawal** 
- **Years until Retirement** 
- **Accumulation Return (%)** 
- **Retirement Return (%)** 
- **Retirement Duration (Years)**

Calculate Retirement Plan →

## Corpus Lifespan

Required Monthly SIP Now

#### The SIP-to-SWP Strategy

## What is SWP?

**SWP (Systematic Withdrawal Plan)** is the reverse of SIP. Instead of investing monthly, you withdraw a fixed amount from your invested corpus every month.

#### Common SWP Use Cases

- **Retirement income** — Regular pension-like withdrawals from your corpus
- **Regular expenses** — Monthly income from inheritance or windfall
- **Tax efficiency** — Systematic redemption to spread capital gains across years
- **Education funding** — Regular withdrawals for tuition fees

## SIP vs SWP: Understanding the Difference

| Aspect | SIP (Accumulation) | SWP (Distribution) |
| --- | --- | --- |
| Direction | Money flows IN monthly | Money flows OUT monthly |
| Goal | Build corpus over time | Generate regular income |
| Phase | Wealth accumulation (working years) | Wealth distribution (retirement) |
| Risk | Rupee cost averaging helps | Sequence-of-returns risk |
| XIRR Sign | Measures growth rate | Measures income yield + growth |

## How is XIRR Calculated for SWP?

For SWP, the cashflow pattern is reversed compared to SIP:

// Example SWP cashflows

- Day 0: -₹50,00,000 (Initial corpus invested)
- Month 1: +₹25,000 (Withdrawal)
- Month 2: +₹25,000 (Withdrawal)
- ... 12 months ...
- Today: +₹48,00,000 (Remaining corpus value)

The XIRR tells you: what annualized return did your corpus generate while also providing you regular income?

### 💡 Key Insight

A positive SWP XIRR means your corpus grew even while you were withdrawing money. A 10% XIRR + 6% withdrawal rate = your money is still growing faster than you're spending it!

## The 4% (or 6%) Safe Withdrawal Rule

The **4% rule** (from US studies) suggests withdrawing 4% of your corpus annually allows it to last 30+ years. In India, with higher expected returns, many use a **6% rule**:

#### Safe Withdrawal Formula

**Monthly Safe Withdrawal = (Corpus × 6%) ÷ 12**

Example: ₹50 Lakh corpus → ₹25,000/month sustainable withdrawal

## Tax Implications of SWP

SWP is more tax-efficient than FD interest because:

- Each withdrawal is part **principal return** (not taxed) and part **gains**
- Only the capital gains portion is taxable
- LTCG on equity funds: 12.5% on gains above ₹1.25 Lakh/year
- You can spread redemptions across financial years to optimize taxes

## Frequently Asked Questions

#### What's a good XIRR for SWP?

For equity-based SWP, 10-12% XIRR is considered good. For debt funds, 7-8% is typical. If XIRR exceeds your withdrawal rate, your corpus is still growing!

#### Does SWP work in a bear market?

SWP faces "sequence-of-returns risk" — withdrawing during market crashes depletes corpus faster. Consider keeping 2-3 years of withdrawals in liquid funds as buffer.

#### SWP vs Dividend Option: Which is better?

SWP from growth option is generally more tax-efficient than dividend (IDCW) option because you control the timing and amount of "income".

#### How do I start SWP on my mutual fund?

Log into your AMC/CAMS/KFintech portal → Select fund → "SWP" option → Enter amount and frequency → Set start date. Most platforms allow weekly, monthly, or quarterly SWP.

### Plan Your Retirement Income

Calculate your SWP XIRR and check if your corpus will last.

[Calculate SWP Returns →](/content/site-root.html)