SWP Calculator — Plan Regular Withdrawals From Your Investments
See how long your money lasts if you withdraw a fixed amount regularly — or what's left after a set number of years. Works in GBP, EUR, USD, or INR.
How the SWP Calculator Works
A Systematic Withdrawal Plan is essentially a SIP in reverse. Instead of adding a fixed amount every month and watching a balance grow, you start with a lump sum and withdraw a fixed amount every month — while the rest stays invested and continues earning returns. The big question SWP planning answers is: does the growth on what's left keep up with what I'm taking out, or am I slowly draining the pot?
This calculator simulates that month by month. Enter your starting investment, how much you plan to withdraw each month, your expected annual return, and how many years you want to plan for. It shows your remaining balance at the end of that period — along with how much you've withdrawn in total and how much growth offset that.
The Core Tension — Withdrawal Rate vs Growth Rate
Here's the relationship that matters most. If your annual withdrawal rate (monthly withdrawal × 12, as a percentage of your total balance) is lower than your expected annual return, your balance can actually grow over time even while you're withdrawing from it. If your withdrawal rate is higher than your return, the balance shrinks — possibly to zero, depending on how much higher and for how long.
| Starting Balance | Monthly Withdrawal | Annual Withdrawal Rate | vs 6% Return |
|---|---|---|---|
| £100,000 | £333 | 4% | Balance grows slowly |
| £100,000 | £500 | 6% | Roughly stable |
| £100,000 | £667 | 8% | Slowly depletes |
| £100,000 | £1,000 | 12% | Depletes faster |
The "4% rule" you may have come across in retirement planning discussions is based on roughly this logic — historically, a withdrawal rate around 4% of the starting balance (adjusted for inflation each year) has had a reasonably high chance of lasting 30 years across a range of historical market scenarios. It's a starting point for thinking, not a guarantee — markets don't move in straight lines, and the order in which good and bad years occur matters more than people expect.
A Worked Example
Say you have £200,000 invested, and you withdraw £800 a month (that's £9,600 a year, or 4.8% of the starting balance), assuming 6% annual returns. Over 20 years, you'd withdraw a total of £192,000 — almost your entire original balance — but because the remaining money kept growing at 6%, the calculator might show a remaining balance still well above zero, even after taking out nearly what you started with. This is the "magic" (and the risk) of SWP — growth and withdrawals happening simultaneously.
SWP vs Just Living Off Interest
Some people prefer the psychological comfort of "only spending the interest/dividends, never touching the capital." Mathematically, a SWP that withdraws at or below your investment's growth rate achieves something similar — the capital is preserved or grows. The difference is largely about how income is generated (selling units vs receiving dividend/interest payments) and the tax treatment in your country, which can differ between the two approaches. Worth checking with a tax adviser if this distinction matters for your situation.
Frequently Asked Questions
What withdrawal rate is considered "safe"?
There's no universally "safe" rate — it depends on your investment mix, time horizon, and how flexible you can be if markets underperform. The commonly referenced "4% rule" comes from historical studies suggesting that withdrawing around 4% of a starting balance, adjusted for inflation annually, had a reasonable success rate over 30-year periods historically — but it's based on past data from specific markets and isn't a guarantee for the future.
What happens if my withdrawal rate is higher than my return rate?
Your balance will gradually decrease over time, since withdrawals are exceeding what growth can replace. It won't necessarily run out immediately — it depends on the gap between the two rates and your starting balance — but eventually, if unchanged, the balance will reach zero. The calculator above will indicate if this happens within your chosen time period.
Does this calculator account for inflation?
No — it assumes a fixed monthly withdrawal amount throughout the period. In reality, many people increase their withdrawal amount over time to keep pace with rising costs, which would deplete a balance faster than this simple model shows. For a more complete picture, you could run the calculation with a higher effective withdrawal amount to roughly account for this.
Is SWP only for retirement?
No — while retirement income is the most common use case, SWPs can be used any time someone wants regular income from a lump sum while keeping the remainder invested. This might include funding education costs over several years, supplementing income during a career break, or simply as a way to gradually move money from an investment into a current account on a schedule.
Why does the order of good and bad years matter (sequence risk)?
Because withdrawals and market movements interact. If a downturn happens early, you're withdrawing a fixed amount from an already-reduced balance, leaving less to benefit from the eventual recovery. The same average return, with a downturn happening late instead of early, can produce a meaningfully different outcome. This is why two investments with identical average returns can lead to very different SWP outcomes depending on when the good and bad years occurred.