How long will my SWP last?
Calculate systematic withdrawal plan (SWP) returns and sustainable withdrawal rates for retirement.
- Left at the end
- $39,017.99
Taking $1,000.00 a month from $100,000.00 at 8% a year leaves $39,017.99 after 10 years, after taking out $120,000.00.
- Total taken out
- $120,000.00
- Total interest earned
- $59,017.99
- What the plan does
- leaves $39,017.99 after 10 years
- Most you can take each month
- $1,213.28
- Months
- 120
Left at the end: $39,017.99. Taking $1,000.00 a month from $100,000.00 at 8% a year leaves $39,017.99 after 10 years, after taking out $120,000.00.
How long does the money last?
What does each year look like?
The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use
How to calculate
Computes what is left of an investment after fixed monthly withdrawals, how much you take out, the interest earned, and when the money runs out.
Example with the default inputs (Amount invested $100,000.00, Take out each month $1,000.00, Expected return (per year) 8%, For how long? (years) 10): Taking $1,000.00 a month from $100,000.00 at 8% a year leaves $39,017.99 after 10 years, after taking out $120,000.00.
Method: Each month, add interest at the yearly rate ÷ 12, then take out the withdrawal (or whatever is left, if that is less).
- The return is a nominal yearly rate compounded monthly: each month earns the rate ÷ 12.
- Withdrawals come out at the end of each month, after that month’s interest.
- When the balance cannot cover a withdrawal, the last withdrawal is what is left and the plan stops.
- The return does not change. Tax, exit loads, and fees are not included.
Worked examples
Each example is checked against the calculator on every build.
- Amount invested $100,000.00, Take out each month $1,000.00, Expected return (per year) 8%, For how long? (years) 10 gives Left at the end $39,017.99, Total taken out $120,000.00, Total interest earned $59,017.99, Most you can take each month $1,213.28.Source: U.S. Securities and Exchange Commission, Investor.gov compound interest formula. https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
- Amount invested $50,000.00, Take out each month $1,500.00, Expected return (per year) 8%, For how long? (years) 1 gives Left at the end $35,475.09, Total interest earned $3,475.09, Total taken out $18,000.00.Source: U.S. Securities and Exchange Commission, Investor.gov compound interest formula. https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
- Amount invested $100,000.00, Take out each month $2,000.00, Expected return (per year) 6%, For how long? (years) 10 gives Left at the end $0.00, Total taken out $115,361.36, The money runs out after 4 years, 10 months.Source: U.S. Securities and Exchange Commission, Investor.gov compound interest formula. https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
- Amount invested $100,000.00, Take out each month $1,000.00, Expected return (per year) 0%, For how long? (years) 10 gives Left at the end $0.00, Total taken out $100,000.00, Total interest earned $0.00, The money runs out after 8 years, 4 months.Source: U.S. Securities and Exchange Commission, Investor.gov compound interest formula. https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
How the balance is worked out
You invest a lump sum P and take out a fixed amount W at the end of every month for the years you choose. The yearly return r (as a decimal) is a nominal rate compounded monthly, so each month earns i = r ÷ 12.
Each month:
- Interest is added: balance × i.
- The withdrawal comes out. If the balance is smaller than W, the last withdrawal is what is left, the balance is 0, and the plan stops.
While the money lasts, the balance after n months is the textbook formula:
balance = P × (1 + i)^n − W × ((1 + i)^n − 1) ÷ i
(at 0%, balance = P − n × W).
The other results:
- Total taken out adds up every withdrawal, including a smaller last one.
- Total interest earned is what is left + total taken out − P.
- The money runs out after shows the number of withdrawals, in years and months, when the money runs out before the end of the plan: the plan stops early, or the last withdrawal is only part paid. When the last full withdrawal leaves exactly 0 at the end of the plan, the money lasts, and this is not shown.
- The answer sentence says what the plan does: “runs out after 4 years, 10 months” when the money runs out first, or otherwise “leaves $39,017.99 after 10 years” (what is left after the years of the plan).
- Most you can take each month is the level withdrawal that leaves exactly 0 at the end of the plan: W = P × i ÷ (1 − (1 + i)^(−n)) with n = years × 12, or P ÷ n at 0%.
Assumptions
- The return does not change from month to month.
- Withdrawals come out at the end of each month, after that month's return.
- Tax, exit loads, and fund fees are not included.
Worked examples by hand
100,000 invested, 1,000 a month, 8% a year, 10 years. i = 0.08 ÷ 12 and n = 120, so (1 + i)^120 = 2.219640. Balance = 100,000 × 2.219640 − 1,000 × 1.219640 ÷ 0.0066667 = 221,964.02 − 182,946.03 = 39,017.99. You take out 120 × 1,000 = 120,000, so the interest is 39,017.99 + 120,000 − 100,000 = 59,017.99. The most you could take each month for 10 years is 100,000 × 0.0066667 ÷ (1 − 2.219640^(−1)) = 1,213.28.
100,000 invested, 2,000 a month, 6% a year, 10 years. The money runs out: 57 full withdrawals leave 1,354.58. With one more month of interest that is 1,361.36, which is the 58th and last withdrawal. You take out 115,361.36 in total over 4 years and 10 months.
100,000 invested, 1,000 a month, 0%. Nothing grows, so 100,000 ÷ 1,000 = 100 withdrawals: the money runs out after 8 years and 4 months.
50,000 invested, 1,500 a month, 8%, 1 year. Balance = 50,000 × 1.083000 − 1,500 × (1.083000 − 1) ÷ 0.0066667 = 54,149.98 − 18,674.89 = 35,475.09. You take out 12 × 1,500 = 18,000, so the interest is 35,475.09 + 18,000 − 50,000 = 3,475.09.
Other questions people ask
What is a Systematic Withdrawal Plan (SWP)?
A Systematic Withdrawal Plan (SWP) is an investment strategy where you invest a lump sum amount and then withdraw a fixed amount regularly (usually monthly) from your investment corpus. The remaining amount continues to earn returns, helping you generate a steady income stream while potentially preserving your capital. Our systematic withdrawal plan calculator helps you plan and optimize your withdrawal strategy.
How does the SWP calculator work?
The SWP calculator calculates your total withdrawals, total interest earned, and final corpus value based on your initial investment, monthly withdrawal amount, expected return rate, and time period. Each month it adds that month's return (the yearly rate divided by 12), then takes out your withdrawal. If the money runs out before the end, it tells you when. It also shows the most you can withdraw each month so the money lasts the whole period.
What is the difference between SWP and SIP?
SIP (Systematic Investment Plan) involves investing a fixed amount regularly to build wealth, while SWP (Systematic Withdrawal Plan) involves withdrawing a fixed amount regularly from an existing investment corpus. SIP is for wealth creation, while SWP is for income generation from accumulated wealth. Our systematic withdrawal plan calculator helps you understand the withdrawal phase of your investment journey.
When should I use an SWP?
SWP is ideal for retirees who need regular income from their investments, individuals who want to generate passive income from their savings, or anyone who wants to create a steady income stream while potentially preserving their capital. It's particularly useful for retirement planning and income generation. Our systematic withdrawal plan calculator helps you determine the optimal timing and amount for your withdrawals.
What factors affect my SWP returns?
Your SWP returns depend on your initial investment amount, monthly withdrawal amount, expected return rate, and time period. Higher withdrawal amounts relative to your investment will deplete your corpus faster, while higher returns can help sustain withdrawals longer. Our systematic withdrawal plan calculator allows you to analyze how these factors impact your long-term financial sustainability.
Can I change my withdrawal amount during the SWP?
Yes, most mutual funds and investment platforms allow you to modify your SWP withdrawal amount. You can increase, decrease, or pause withdrawals based on your changing financial needs. However, it's important to consider the impact on your long-term financial goals. Our systematic withdrawal plan calculator can help you model different withdrawal scenarios.
What happens if my investment returns are lower than expected?
If returns are lower than expected, your corpus may deplete faster than planned. You might need to reduce your withdrawal amount or extend your investment period. It's important to have a buffer and be flexible with your withdrawal strategy. Our systematic withdrawal plan calculator helps you stress-test your withdrawal plan against different return scenarios.
Is SWP suitable for all types of investments?
SWP works best with equity mutual funds, balanced funds, or other growth-oriented investments that can potentially generate higher returns. Fixed-income investments like bonds or FDs can also be used for SWP, but the returns may be lower. Our systematic withdrawal plan calculator can help you evaluate different investment options for your withdrawal strategy.
How do I calculate the optimal withdrawal amount?
The optimal withdrawal amount depends on your financial needs, expected returns, and desired corpus preservation. A common rule of thumb is the 4% rule - withdrawing 4% of your initial investment annually. However, this should be adjusted based on your specific circumstances and market conditions. Our calculator shows the most you can withdraw each month so that the money lasts exactly the whole period.
What are the tax implications of SWP?
SWP withdrawals may be subject to capital gains tax depending on the type of investment and holding period. Short-term capital gains are taxed at your income tax rate, while long-term capital gains may have different tax treatment. It's advisable to consult a tax professional for specific guidance. Our systematic withdrawal plan calculator shows pre-tax returns.