Each month, this simulation accrues interest on the current balance, then subtracts the fixed withdrawal: Balance(next) = Balance(current) × (1 + r/12) − withdrawal, where r is the annual rate as a decimal. Applied to your inputs:

At ₹82,000 per month against ₹2,00,000 and an assumed 9% return, this simulation runs out after about 3 months — roughly 0 years and 3 months — having paid out a total of ₹2,46,000. The annualised withdrawal rate here works out to about 492.00% of the starting corpus, which the assumed return could not fully sustain over the long run.

A commonly cited (US-originated, not India-specific) reference point is the "4% rule" — withdrawing about 4% of a corpus annually, adjusted for inflation, has historically had a high probability of lasting 30 years in backtested US market data. Applying a similar, slightly more liberal 7% reference annually to your ₹2,00,000 corpus would suggest a monthly withdrawal of about ₹1,167 — compare that with your actual ₹82,000 to gauge whether you are drawing conservatively or aggressively. This is a rough reference, not a rule that applies directly to Indian mutual funds, which have different return, volatility, and tax characteristics than the US equity market data the original research was based on.

A key advantage of SWP over FD interest or annuity income is that only the gains portion of each withdrawal is taxed — not the entire amount. Each SWP instalment is treated as a partial redemption of units, so it is split between return of principal (not taxed) and capital gain (taxed per the fund's category and holding period). This calculator does not track unit-level cost basis, so treat the numbers below as a rough illustration only.

• Equity-oriented funds: gains on units held over 12 months are LTCG, taxed at 12.5% above a ₹1,25,000 yearly exemption under rules effective from July 2024. On the simulated interest component of about ₹2,684 here, taxable LTCG after the exemption would be roughly ₹0, working out to an estimated tax of about ₹0 — illustrative only, since actual gains are realised withdrawal by withdrawal, not as one lump sum.
• Debt-oriented funds (bought on or after 1 April 2023): the gains portion of each withdrawal is taxed at your income-tax slab rate, following the Finance Act, 2023 change.
• No TDS on mutual fund SWP: unlike bank FD interest, mutual funds generally do not deduct TDS on redemption proceeds for resident individual investors, though you remain liable to report and pay tax on the gains portion yourself.
• Advance tax may apply: if your total tax liability for the year (including gains from SWP withdrawals) exceeds the advance tax threshold, you may need to pay tax in quarterly instalments rather than waiting until year-end filing, to avoid interest under Sections 234B/234C.

1. Start with the corpus available to begin withdrawals from: ₹2,00,000.
2. Decide a monthly withdrawal amount: ₹82,000, which is about 492.00% of the corpus on an annualised basis.
3. Assume a long-term annual return for the invested balance: 9%.
4. Each month, interest accrues on the current balance first, then the withdrawal is subtracted — so early months see the balance shift by a small net amount, while later months (if the balance has grown or shrunk significantly) see a different net effect.
5. Running this month by month, the balance reaches zero after about 3 months (0 years, 3 months), having paid out a total of ₹2,46,000.
6. Of that total, about ₹2,684 came from investment growth (interest/gains) and the rest from the original principal being drawn down.
7. After an illustrative tax estimate of about ₹0 on the gains portion (assuming an equity-oriented fund held over 12 months), the effective net cash flow is slightly lower than the gross withdrawal figures shown throughout this page.

A flat ₹82,000 monthly withdrawal buys less each year as prices rise. As a contrast, if the withdrawal were stepped up by 5% every 12 months (a simple way to keep pace with typical inflation), the same ₹2,00,000 corpus at 9% would instead last about 0 years and 3 months, with the withdrawal amount rising to roughly ₹82,000 per month by the time the simulation ends, and total withdrawals of about ₹2,46,000.

This step-up scenario illustrates the trade-off between keeping pace with inflation and preserving corpus longevity — a higher withdrawal path generally shortens how long a given corpus can sustain payouts. Neither the flat nor the stepped-up path is inherently "correct" — the right choice depends on how much flexibility you have to reduce spending if the corpus runs low, and how much other guaranteed income (pension, SCSS, annuity) you have as a backstop.

• Retirement proceeds — provident fund, gratuity, or National Pension System (NPS) lumpsum withdrawal.
• Sale of a property or business, when the seller wants regular income rather than a large idle balance.
• An existing lumpsum mutual fund investment that has grown over time and is now needed for income.
• Insurance maturity proceeds or a one-time bonus that the investor wants to convert into a monthly cash flow.
• A voluntary retirement scheme (VRS) payout or a severance package, where the recipient wants to smooth a large one-time sum into a steady monthly income rather than spending it down unevenly.

• Starting corpus: ₹2,00,000
• Monthly withdrawal: ₹82,000
• Illustrative annual return: 9%
• Total withdrawn (simulated): ₹2,46,000
• Interest component (simulated): ₹2,684
• Remaining balance (end): ₹0
• Annualised withdrawal rate: 492.00%

Different monthly withdrawals (same corpus and rate)

Different return assumptions (same corpus and withdrawal)

Different starting corpus (same withdrawal and rate)

Build a margin of safety: lower withdrawal rates, higher emergency cash, and periodic reviews beat a single optimistic return assumption. Pair SWP planning with health insurance and income tax estimates for a fuller retirement picture.

• Assuming a flat, guaranteed annual return. 9% here is an input, not a promise — a bad sequence of early negative returns (sequence-of-returns risk) can deplete a corpus faster than a smooth average return would suggest, even if the long-run average matches your assumption.
• Ignoring inflation. A fixed ₹82,000 monthly withdrawal buys less over time as prices rise. Some investors step up withdrawals annually to keep pace, which shortens how long the corpus lasts compared with a flat withdrawal.
• Not accounting for expense ratios and exit loads. This simulation is pre-cost; actual fund expense ratios (roughly 0.5-2% a year depending on the fund and plan type) reduce the effective net return you should reasonably assume.
• Withdrawing more than the fund can sustain. An annualised withdrawal rate meaningfully above the assumed return (as seen in the sensitivity tables above) draws down principal, not just gains, which compounds the depletion problem in later years.
• Forgetting to track the tax angle. Even though only the gains portion is taxed, you are still responsible for reporting and paying tax on that portion each year — it does not arrive pre-taxed like an FD with TDS already deducted.

SWP is one of several ways to convert a corpus into regular income. Here is how it compares broadly with two common alternatives used by Indian retirees:

Many retirees use a mix — SCSS or an annuity for a guaranteed floor of income, and SWP from a mutual fund portfolio for growth potential and tax efficiency on the remainder. This calculator only models the SWP leg.

SCSS currently has its own investment ceiling and is available only to senior citizens (and certain retirees under specific conditions) through banks and post offices, with interest paid quarterly and revised periodically by the government — check the current SCSS interest rate and limit before relying on it in your own plan, since both are subject to change each quarter.

The rate you enter implicitly assumes a fund category. As a general (not personalised) framework:

• Equity or aggressive hybrid funds tend to be used by investors with a long horizon who can tolerate volatility, since sequence-of-returns risk is a real concern if the market falls sharply in the early years of withdrawals.
• Conservative hybrid or balanced advantage funds are a common middle ground for SWP corpora — lower expected volatility than pure equity, some growth potential, and (depending on equity allocation) may retain equity-like taxation if the equity component stays above 65%.
• Debt funds suit investors prioritising stability over growth, accepting slab-rate taxation on gains (for units bought on or after 1 April 2023) and typically lower long-run returns than equity.
• A bucket strategy — splitting the corpus across a near-term low-volatility bucket (debt/FD) for the next few years of withdrawals and a longer-term growth bucket (equity/hybrid) for later years — is a common approach to reduce sequence-of-returns risk without giving up all growth potential.

• Those with no other guaranteed income — relying entirely on a market-linked SWP with no pension, SCSS, or annuity floor can be risky if markets underperform for an extended stretch early in retirement.
• Investors uncomfortable with any balance volatility — an SWP corpus invested in market-linked instruments will fluctuate in value, which can be unsettling for someone who wants complete certainty.
• Those needing the withdrawal rate to be very high relative to the corpus — as the sensitivity tables above show, a high withdrawal rate compared with the assumed return depletes the corpus quickly, which may not meet a long retirement horizon.

• Retirees converting a retirement corpus (provident fund, gratuity, or accumulated investments) into a monthly income stream to replace a salary.
• Investors seeking tax-efficient regular income, since only the gains portion of each SWP instalment is taxed, compared with fully taxable FD interest.
• Anyone testing corpus sustainability before committing to a withdrawal plan, using the sensitivity tables above to see how withdrawal rate and return assumptions change the outcome.
• People comparing SWP against an annuity or SCSS for the guaranteed-vs-flexible trade-off in retirement income planning.

Withdrawing ₹82,000 a month from a ₹2,00,000 corpus at an assumed 9% return is an annualised withdrawal rate of about 492.00%. At that rate, the simulated balance runs out in about 0 years and 3 months — worth revisiting if this corpus needs to last longer, either by lowering the withdrawal, choosing a higher-return (and higher-risk) allocation, or adding another income source. Use the sensitivity tables above to see exactly how much a change in withdrawal, rate, or corpus shifts the outcome before committing to a real withdrawal plan.

Figures on this page are computed live from the corpus, monthly withdrawal, and assumed annual rate you entered, using a month-by-month simulation that accrues interest first, then subtracts the withdrawal, capped at 600 months (50 years). Sensitivity tables recompute the same simulation at nearby withdrawal, rate, and corpus values. Tax estimates use illustrative rates and exemption thresholds current as of rules effective from July 2024 and do not account for fund-specific expense ratios, exit loads, or your actual unit-level cost basis. Nothing here is investment, tax, or retirement planning advice — consult a professional for a plan tailored to your situation.