SWP Calculator
SWP Calculator
A SWP (Systematic Withdrawal Plan) is an investing methodology in which the investor expects a monthly cash withdrawal from his investments.
SWP investing is usually followed by Retired individuals, as they want a regular cash flow for their daily needs. However, many individuals from different age groups depending on their risk appetite and financial needs can also invest in SWP.
SWP does not necessarily has to be a mutual fund, it can also be a FD with monthly interest withdrawal plan, house rent, etc.
SWP Calculator can also be called as a Profit Withdrawal Calculator or an Interest Withdrawal Calculator because it works on the principle that only the profits or interest is withdrawn on regular basis and the initial capital remains invested.
How does the SWP Calculator work?
In order to use the SWP Calculator, one should know the following terms:
Amount to be withdrawn per month is the portion of annual profit/interest that is withdrawn by the investor on a monthly basis.
Expected Rate of Interest is the percentage expected returns earned on the total investments.
Amount to be invested is the total amount that you are required to invest today to be able to earn monthly returns as per expected rate of return.
Formula:
A = W/r
Example:
Assume you want to withdraw Rs 10000 per month by investing in a financial product that provides an expected rate of return of 5%.
Amount to be invested = 120000/5% = Rs. 24,00,000
Why should you use a SWP Calculator online?
Using the SWP Calculator online helps you in making a financial decision on whether to invest in a particular financial product or not? on a real-time basis. Thus, helping you grab an opportunity quickly.
Advantages of using a SWP Calculator:
Listed below are few advantages of using a SWP Calculator:
The SWP Calculator helps you in calculating the amount required for monthly withdrawal of profits irrespective of the currency denomination, that is, you can use it for calculation in INR, USD, JPY, EUR or any currency of your choice.
SWP Calculator helps you in making decisions quickly that is because you can compare different financial products for investments on parameters like total investments and expected rate of return on a real time basis.
The SWP Calculator does all the mathematics functions online with few inputs on your end. No coding or doing the maths is needed, this makes it easy to operate.
You can calculate the total investment required to earn a fixed monthly withdrawal on SWP Calculator, which helps in making a financial plan that matches your financial goals.