How this calculator works
An SWP estimate simulates a corpus month by month: assumed growth is applied first, then a withdrawal is taken at month-end.
- Step 1Apply the return8%Convert the effective annual assumption to an equivalent monthly rate.
- Step 2Take a withdrawal₹10,000Withdraw at the end of each month.
- Step 3Track the balance13 years 5 monthsRepeat until the balance reaches zero or the 100-year limit.
For inflation-linked withdrawals, the amount rises after every 12 withdrawals. The calculator keeps full precision internally and rounds only displayed values.
What this result leaves out
- Return volatilityThe model assumes the same effective return every year.
- TaxesNo tax is deducted from the corpus or withdrawals.
- Fees and exit loadsThese costs are not included in the balance simulation.
- Personal circumstancesThe result does not account for individual needs or market conditions.
Worked example
With ₹10,00,000 and a fixed ₹10,000 month-end withdrawal at 8% effective annual return, the default simulation lasts 13 years 5 months.
- Equivalent monthly rate
i = (1 + R)^(1/12) − 1- Balance after each withdrawal
Bₘ = Bₘ₋₁ × (1 + i) − Wₘ
- Starting corpus₹10,00,000
- Requested withdrawal₹10,000 per month
- Total withdrawn in the simulation₹16,07,804
- Estimated duration161 months
Reading the result
- FixedSame amount each monthThe requested withdrawal does not rise during the simulation.
- Inflation-linkedRises once a yearThe requested amount increases after every 12 withdrawals using your inflation assumption.
The final withdrawal may be smaller than requested when the balance cannot cover a full amount. A duration of at least 100 years means the corpus remained positive through the simulation limit.
When does a corpus last?
If each withdrawal is smaller than the growth the corpus earns that month, the balance never falls, at least while the assumed return holds.
Withdraw more than the monthly growth and the balance starts to shrink, slowly at first and then faster. Inflation-linked withdrawals rise every year, so they catch up with the growth sooner.
To work out the corpus a retirement needs in the first place, use the retirement planner. The pension calculator shows the monthly income a corpus can pay for a fixed number of years, and the inflation calculator shows what a withdrawal will buy later.
Common mistakes
Mistake: Treating the assumed return as a predictable yearly outcome.
Instead: Use several assumptions; actual returns vary and their sequence matters.
Mistake: Comparing a fixed withdrawal with an inflation-linked plan as if they were equal.
Instead: Check how the annual increase changes both withdrawals and depletion time.
Mistake: Reading this estimate as a personal recommendation.
Instead: Use it only as an illustration of the assumptions entered.
This calculator does not recommend an investment or withdrawal amount. Mutual fund investments are subject to market risks. Read all scheme-related documents carefully.
Checking the method
A separate script recomputes every test case two ways: month by month, and as a direct sum of each dated withdrawal.
Both must agree with the published test values to half a paisa. Read how we test our calculators, or browse more money calculators.