SWP Calculator

How to use SWP Calculator

1. Enter the starting corpus and the amount you want to withdraw every month.
2. Enter the expected annual return of the investment and the number of years you want to model.
3. Optionally enter a yearly increase in the withdrawal, for example to keep up with rising costs.
4. Read the remaining balance, total withdrawn and the month the money runs out, if it does.

How a systematic withdrawal plan works

In a systematic withdrawal plan you keep a corpus invested and take out a fixed amount at regular intervals. The money left in the pot keeps earning the expected return. This calculator assumes the withdrawal happens at the start of each month and the remaining balance then grows by the annual return divided by 12. If a yearly increase g is set, the withdrawal in year y is the starting amount times (1 + g)^(y - 1). If the balance is smaller than the withdrawal in some month, the final smaller amount is paid and the corpus is shown as exhausted in that month.

Worked examples

A corpus of 5,000,000 with a monthly withdrawal of 40,000 at an assumed 8 percent return for 20 years: total withdrawn is 9,600,000 and the remaining balance after 20 years is 916,125.12, so the plan survives with room to spare in this smooth scenario. A smaller corpus of 1,000,000 with a withdrawal of 20,000 a month at 6 percent runs out in month 58, about 4 years and 10 months, because each withdrawal is much larger than the interest the pot earns. A quick rule of thumb: if a month of growth on the balance is less than the withdrawal, the pot is shrinking.

Tips and limits

Compare the plan at several return levels, add an annual increase if your costs will grow, and keep a separate emergency fund so you are never forced to sell at a bad time. For a lasting plan the withdrawal rate, meaning yearly withdrawals divided by the corpus, matters more than the exact figures.

• Returns are assumptions; real returns vary from year to year.
• Years must be a whole number from 1 to 60.
• Taxes, fees and exit loads are not included.
• This is an estimate only and not financial advice.
• All figures are computed in your browser and are not stored.

Why use this swp calculator tool

• Depletion month. If the corpus cannot last, the tool tells you the exact month it runs out.
• Annual withdrawal increase. Model withdrawals that rise every year, instead of a flat amount whose value shrinks with inflation.
• Year-wise breakdown. Opening balance, withdrawals, growth and closing balance for each year.
• Stress-test friendly. Negative or low returns can be entered to see how fragile a plan is.

Frequently asked questions

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