An SWP (Systematic Withdrawal Plan) is a feature that allows you to withdraw from your investments systematically. It allows mutual fund investors to withdraw a fixed amount frequently. On that note, the SWP calculator is a helpful tool for estimating the final value of your investments. It guides you in determining the right method of withdrawing from your corpus and getting high returns. Additionally, you can use this tool to figure out how long your corpus can deliver funds based on the amount you withdraw. So, make sure to understand how you can use the calculator and make the most of your investments.
How Does a SWP Calculator Work
The calculator shows the regular cash flow through the withdrawal plan. It uses the following mathematical formula:
A = PMT [(1+r/n)^nt-1) / (r/n)]
Here,
A = The future value of the investment
PMT = Payment amount for each period
n = Number of compounds in a period
t = Number of periods the money is invested
How to Use the SWP Calculator
The main motive for using the calculator is to help you estimate the returns from your mutual fund investment over a tenure. You can use the tool in the following manner:
- Start by filling in the total investment amount
- Enter the amount to be withdrawn per month
- Fill in the investment period in years and the expected returns in a percentage
After filling in the information, you will be able to see a breakdown of the final value of your investment, the amount you have withdrawn and the total investment made.
Benefits of Using the SWP Calculator
Here are some of the benefits of using the calculator.
- Effortless Calculation Process: There is a formula to calculate your final value, but using it manually can be time-consuming. Instead, using the Systematic Withdrawal Plan calculator simplifies the job and gives you the estimate in a matter of minutes.
- Seamless Use: A SWP calculator is incredibly simple to use. All you need to do is enter the details, and then you will have your results in your hands.
- Finding the Best Withdrawal Plan: Systematically withdrawing your investments can be incredibly vital in your journey. The calculator helps you find the best plan to make your withdrawals from the corpus. In addition, you can find your desired result by changing your inputs as many times as you need.
- Cost-Efficient: The SWP calculator is entirely free to use, which means you do not have to pay a single dime. No matter how many times you need to change your inputs and find your results, you can use it without paying anything.
Wrapping Up!
The SWP calculator can be a complete game changer when it comes to simplifying your estimations on what your final value of mutual fund investment will be. You can use the calculator at any time to make your evaluations but you need to include the right information to get an accurate calculation. So before you start using the calculator, keep numbers like your total investment, your monthly withdrawal and other information with you. This will ensure that you get a clear perception of your investment’s final value and can make decisions accordingly.
FAQs
Q1. How does the SWP calculator help in your investment decision?
The calculator shows how your monthly withdrawals from your mutual fund corpus determine the final value of the investment. This final value is received after assessing your total investment, monthly withdrawals, investment period, and expected returns.
Q2. How is SWP beneficial to investment?
An SWP is a great option if you want a frequent source of income. It can provide monthly, quarterly, semi-annual, and annual funds to you after retirement. You can withdraw your funds systematically and determine what the final value of your investment becomes.
Q3. Where can I find the SWP calculator online?
You can find the calculator on any bank or financial institution’s platform. Even some third-party websites have these calculators for seamless use. All these calculators, no matter where you use them, work on the same algorithms and require the usual information to get your assessment.
Q4. How can I invest in a SWP?
SWP is not an investment plan but is a withdrawal structural. Its full form is a Systematic Withdrawal Plan, which you can choose while making your mutual fund investment. With this plan, you can get a steady inflow of funds every month or at different durations, even when you are already retired. At the same time, you can use this plan to fund considerable financial expenses as well including your children’s higher education or wedding.
Q5. Can I choose the withdrawal amount, or is it fixed from before?
You can choose the withdrawal amount according to your need and receive it at any time
