What Is a Systematic Withdrawal Plan?

An SWP converts a lump-sum investment into a steady monthly income stream. Each month the plan redeems a fixed amount from the corpus while the remainder continues earning returns. It's the standard way retirees and long-term investors fund living expenses without selling everything at once.

The Withdrawal Rate Math

The sustainable withdrawal rate depends on the gap between your withdrawal and your return. Withdraw 4.8% per year against a 7% return and the corpus grows. Withdraw 8% against 5% and depletion is inevitable. This calculator runs the month-by-month simulation so you can see the depletion month precisely.

Planning for the Long Run

Keep the initial withdrawal rate at or below 4–5% for a 20+ year horizon. Model conservative returns (5–6%) to stress-test your plan, and consider inflation-indexed withdrawals only after confirming the base rate is sustainable. A well-planned SWP should survive both bear markets and rising costs.