SWP vs FD interest for retirement income?

SWP from balanced/equity funds is more tax-efficient and inflation-beating. FD gives fixed income but interest is fully taxable and doesn't grow with inflation.

What if markets crash during SWP?

During crashes, more units are redeemed for the same amount. This can deplete corpus faster. Keep 2-3 years of withdrawals in debt funds as a buffer.

SWP — Regular Income from Mutual Funds

A Systematic Withdrawal Plan (SWP) lets you withdraw a fixed amount from your mutual fund investment at regular intervals, creating a pension-like income stream.

How SWP Works

You invest a lump sum in a mutual fund and set up monthly/quarterly withdrawals. Units are redeemed to pay you. Remaining units continue earning returns. If returns exceed withdrawals, your corpus can actually grow.

SWP Rate Planning

Withdraw 4-6% of corpus annually for sustainability. From equity funds at 12% average return, withdrawing 6% means corpus still grows at 6% (beating inflation). Example: ₹1Cr corpus, ₹50,000/month SWP = 6% withdrawal rate.

Tax Efficiency

Only the capital gains portion of each withdrawal is taxed, not the entire amount. This makes SWP more tax-efficient than FD interest or dividend plans.