FAQs
Example:
| Investment Amount after each withdrawal | Withdrawal Amount | Expected Return |
|---|
| Rs 2,40,000 | Rs 10,000 | Rs 1,283.2 |
| Rs 2,21,283.2 | Rs 10,000 | Rs 1174.14 |
| Rs 2,02,457.4 | Rs 10,000 | Rs 1064.2 |
| Rs 1,83,521.8 | Rs 10,000 | Rs 953.8 |
8 more rowsBest SWP Mutual Funds in India
- ICICI Pru Equity & Debt Growth Plan: ...
- Franklin India Equity Hybrid Growth Plan: ...
- SBI Equity Hybrid Regular Growth Plan: ...
- Quant Absolute Fund Growth Plan: ...
- Canara Robeco Equity Hybrid Regular Growth Plan: ...
- Few Things to Keep in Mind Before Investing in SWP Plan. ...
- Important Things to Remember:
Equity Mutual Fund: SWP Example
The gains on your investments if withdrawn in the first year are treated as Short Term Capital Gains (STCG) and taxed at 15%. If the investment is redeemed after the first year, the gains are called Long Term Capital Gains (LTCG) and are taxed at 10%.
What is the return rate of SWP SBI? ›
SBI Equity Hybrid Fund - Regular Plan -Growth
6 has given returns of 15.70 per cent in the last 10 years. The one who had invested Rs 50 lakh in the fund has a balance of Rs 10,96,206 in their fund after withdrawing 120 instalments of Rs 75,000 monthly pension.
What is the 4% SWP rule? ›
The 4% rule says people should withdraw 4% of their retirement funds in the first year after retiring and take that dollar amount, adjusted for inflation, every year after.
What is the 7% withdrawal rule? ›
What is the 7% rule? The 7% rule involves withdrawing 7 percent of your retirement savings each year. This strategy carries higher risk, especially during market downturns. It can lead to faster depletion of funds compared to more conservative approaches like the 4% rule.
What are the disadvantages of SWP? ›
The downside of a systematic withdrawal plan is that when your investments are down in value, more of your securities must be liquidated to meet your withdrawal needs.
Is SWP good for retirees? ›
With an SWP, you can fix your own pension. Pankaj Shrestha, Head, Investment Services, Prabhudas Lilladher Wealth, insists, “SWP is an ideal tool for retirees to streamline their cash flows in their golden years. Others can also use SWPs to generate a regular, secondary income.”
Is systematic withdrawal plan better than fixed deposit? ›
Which Is Better SWP Or FD? SWP may be a better option for those who need a steady stream of income and are willing to accept fluctuating returns, while FD may be a better option for those who want a guaranteed return on their investment and are willing to lock their money for a certain period of time.
Can I stop SWP anytime? ›
Benefits of SWP
Also, the investor can stop the SWP at any point in time / or can add further investments or even withdraw amount over and above the fixed SWP withdrawals.
While many investors choose the Dividend Option, also known as Income Distribution cum Capital Withdrawal (IDCW), we argue that a Systematic Withdrawal Plan (SWP) from the Growth option of an Mutual Fund scheme could be a better alternative. IDCW is paid from a Scheme's distributable surplus.
Can I start SWP immediately? ›
If an investor has a sizable lump sum of money to invest for an immediate recurring withdrawal, they should choose SWP immediately. The 15% short-term capital gains tax can be avoided if investors start an SWP in their equity plan at least a year after investing.
How much return can be expected from SWP? ›
Here, an individual has invested Rs. 50,000 for tenure of 1 year along with a systematic withdrawal of Rs. 1,000 per month. Interest rate stands at 10%. As such, total return of investments after the end of the tenor stands at Rs. 4,565.
Which type of fund is best for SWP? ›
Best Fund For SWP – FAQ
SBI Equity Hybrid Fund. ICICI Pru Equity & Debt Fund. HDFC Hybrid Equity Fund. Canara Rob Equity Hybrid Fund.
Is SWP a good idea? ›
Systematic Withdrawal Plans (SWP) in mutual funds offer retirees an ideal solution for their financial needs during retirement. As retirees seek a reliable income source, they can utilize their retirement savings, gratuity, or corpus and select the right mutual fund schemes to set up an SWP plan.
What is the 4% safe withdrawal rule? ›
The 4% rule limits annual withdrawals from your retirement accounts to 4% of the total balance in your first year of retirement. That means if you retire with $1 million saved, you'd take out $40,000. According to the rule, this amount is safe enough that you won't risk running out of money during a 30-year retirement.
What is a healthy withdrawal rate? ›
As a rule of thumb, many retirees use 4% as their safe withdrawal rate—the so-called 4% rule. The 4% rule states that you withdraw no more than 4% of your starting balance each year in retirement, adjusted each year for inflation.
What is the perfect withdrawal rate? ›
The 4 percent rule refers to withdrawing 4 percent of your portfolio's balance the first year of retirement, using the portfolio's balance when you retire to calculate your withdrawals. Then your withdrawals are adjusted by the rate of inflation in subsequent years throughout retirement.
Is 6% a safe withdrawal rate? ›
4% is still the safe withdrawal rate, and
If you require a higher withdrawal rate (e.g. 6% or more), then you should have more high growth assets (e.g. stocks) in your portfolio.
