How to plan regular withdrawals with an SWP

Steps

1. Enter the amount you will start with. Here it is ₹50,00,000.
2. Enter the monthly withdrawal you want. Here it is ₹40,000.
3. Enter the return you expect and the number of years: 8% and 20.
4. Read the balance left at the end, or how long the money lasts if it runs out.
5. Try other withdrawals until the plan lasts as long as you need.

How the withdrawal changes how long the money lasts

On ₹50,00,000 at 8%, a withdrawal of ₹30,000 a month still leaves ₹68,45,597 after 20 years, having paid out ₹72,00,000. A withdrawal of ₹40,000 leaves ₹9,16,125. A withdrawal of ₹50,000 runs the money out after 13 years 8 months, having paid out ₹81,68,051. A withdrawal of ₹60,000 runs out after 10 years 1 month.

A small increase in the monthly amount makes a large difference to how long the money lasts, because every rupee taken out stops earning a return.

How the plan works each month

The calculator takes the withdrawal out first and then lets the remaining balance grow by one month of return. When the return is higher than the withdrawal rate the balance can even grow, and when it is lower the balance shrinks until it reaches zero.

Things the plan does not show

It uses a steady return, but real returns vary, and a poor stretch early on does more damage to a withdrawal plan than the same stretch later. It also ignores inflation and tax. If you need the income to rise with prices, test a lower withdrawal or a lower return, and keep a cash buffer for bad years.