Key Features of SWP:

• Regular Withdrawals: Investors can set up monthly, quarterly, half-yearly, or yearly withdrawals.
• Customizable Amounts: The withdrawal amount is pre-decided and can be tailored to the investor's needs.
• Tax Efficiency: Only the gain portion of the withdrawal is taxed, making it more tax-efficient compared to fixed deposits or other interest-based instruments.
• Flexibility: You can start, stop, or modify the SWP at any time.
• Preservation of Principal: Depending on the withdrawal rate and investment returns, the principal amount can remain intact or grow over time.

Benefits of SWP:

• Consistent Income: Ideal for retirees or individuals requiring regular payouts.
• Capital Gains Tax Advantage: For equity funds, long-term capital gains are taxed at favorable rates.
• Rupee Cost Averaging in Reverse: Unlike SIPs, which invest periodically, SWPs withdraw systematically, potentially reducing the impact of market fluctuations.
• Financial Discipline: Helps in planning and maintaining a steady income stream.

Example:

If you have ₹10,00,000 invested in a mutual fund offering an annual return of 8% and set up an SWP of ₹20,000 monthly:

• You receive ₹20,000 regularly.
• Your investment continues to earn returns on the remaining balance, potentially extending the longevity of the corpus.

Would you like to explore how SWP fits into your financial planning services?