SWP for Retirement: How Much Corpus for ₹50,000 a Month?

To withdraw ₹50,000 a month for 25 years, you need a corpus of about ₹64.8 lakh, if it earns 8% a year. For the money to never run out at 8%, you need about ₹75 lakh.

How an SWP works

A Systematic Withdrawal Plan pays you a fixed amount every month from a mutual fund. The rest of the money stays invested and keeps earning. If returns cover your withdrawals, the corpus lasts. If not, it shrinks to zero.

Corpus needed for ₹50,000 a month

These assume a fixed ₹50,000 withdrawn at the end of each month and a steady return. The "never runs out" row is ₹6 lakh a year divided by the return.

How the balance runs down

Here is the ₹64.8 lakh corpus at 8%, paying ₹50,000 every month:

In the early years, returns pay for most of each withdrawal, so the balance falls slowly. Later, the balance falls fast.

How long does ₹50 lakh last?

At 8%, a ₹50 lakh corpus pays ₹50,000 a month for about 13 years 10 months. Then it is gone. That may be enough at 75, but it is risky at 55.

Which return should you assume?

A retirement corpus usually sits in a mix of equity and debt, so its return is lower than pure equity. A lower assumed return gives a bigger, safer corpus. Test your plan at 7% as well as 9%. If it only works at the higher rate, it is fragile.

The catch: inflation

₹50,000 will not buy the same things in 15 years. If you raise the withdrawal by 6% a year, the corpus has to be much larger. Starting at ₹6 lakh a year and rising 6% yearly for 25 years, at 8% returns, needs about ₹1.21 crore.

The 4% rule used by FIRE planners lands in the same range. It says ₹6 lakh a year needs 25 times that, or ₹1.5 crore. See what your FIRE number is.

Make an SWP safer

• Keep 1 to 2 years of withdrawals in a liquid or short-term debt fund. You will not have to sell equity in a crash.
• Start with a lower withdrawal rate. The closer you are to the "never runs out" figure, the safer you are.
• Review every year. If markets fell, cut back for a year instead of selling more units.
• Mind the tax. Each withdrawal is part capital and part gain, and only the gain is taxed.

Plan your own withdrawal

Test any corpus, withdrawal and return in the SWP calculator. To work out the corpus from your expenses and retirement age, use the retirement calculator. For early retirement, try the FIRE calculator.