SWP Calculator with Inflation

Introudction : SWP Calculator with Inflation

SWP Calculator with Inflation stand for Systematic Withdrawal Plan (SWP) is a mutual fund investment withdrawal strategy used when an investor wants to redeem a fixed amount at regular intervals, such as every month. This strategy works for people who want to generate regular income from their mutual fund investments. The SWP calculator by ToolifyPro.com helps to make the entire process easier and improve financial management.

What is a SWP Calculator?

An SWP calculator tool helps investors calculate how much they can withdraw periodically from their mutual fund investments. This tool works as a reverse version of the SIP calculator, where the monthly investment is done, but in this, investors withdraw a fixed amount at regular intervals. The tool helps the investor estimate the length of the last instalment as well as how much income they will generate in that interval.

The tool estimates mutual fund withdrawals based on various factors such as Initial Investment, periodically fixed withdrawal amount, tenure, and expected returns. With the help of these inputs, the tool gives results on how long money will grow and how it will end.

How Does the SWP Calculator Work?

Our  SWP Calculator is very simple and user-friendly, there are only a few inputs that are required for estimating the withdrawal of the investments.

1. Initial Investment Amount: The value to enter in this is how much amount has been invested in the mutual fund lest suppose the initial investment is Rs.50000.
2. Monthly Withdrawal Amount: The values to enter here that how much amount to withdraw periodically. 
3. Expected Rate of Return: Enter the expected return percentage, based on past data it is 10-15%.
4. Investment Duration: In this field have to mention the estimated period in years to know how long the last withdrawal.

Once the details are filled the SWP Calculator will dynamically calculate the returns and the remaining amount, will display the pie chart and generate a table that helps to understand the the returns.

Benefits of Using a SWP Calculator

There are several benefits of using the Toolifypro.com SWP Calculator

• Accurate Planning: This tool takes input from investors and does the accurate calculation, it helps investors to not run out of withdrawal of money too soon.
• Features: This tool has various features such as SWP table, Pie chart, Expected returns adjustment, etc.
• Convenience: This is an online tool that can be accessible from anywhere and anytime.

SWP Formula- How Does the Calcutions Done.

To calculate the SWP (Systematic Withdrawal Plan) with inflation adjustments, we need to account for both the withdrawal amount increasing with inflation and the monthly interest earned on the remaining balance. Below is the full formula breakdown and step-by-step calculation:

Variables:

• Initial Amount (P) = ₹250,000
• Monthly Withdrawal (W) = ₹5,000
• Expected Annual Returns (R) = 10% (annual)
• Inflation Rate (I) = 6% (annual)

Key Formulas:

1.Inflation Adjusted Withdrawal for each year:

This formula adjusts the withdrawal amount for inflation each year.

2.Interest Earned Each Month:

The interest earned each month is based on the remaining balance and the annual return divided by 12 months.

3. Remaining Balance after Withdrawal for each month:

The remaining balance is updated each month by adding the interest earned and subtracting the monthly withdrawal.

Monthly Withdrawal: ₹5,000

Interest Earned (monthly):

Remaining Balance at End of Month 1:

Remaining Balance 1​=250,000+2,083.33−5,000=₹247,083.33
Repeat this calculation for the next 11 months.

Year 2:

• Inflation Adjusted Withdrawal for Year 2:

For each month of Year 2, the new withdrawal amount will be ₹5,300.

Interest Earned (monthly) is calculated on the remaining balance after Year 1.

Year 3:

• Inflation Adjusted Withdrawal for Year 3:

For each month of Year 3, the new withdrawal amount will be ₹5,618.

Full Calculation:

Year 1:

Remaining Balance at Month 1=250,000+2,083.33−5,000=247,083.33
Remaining Balance at Month 2=247,083.33+2,058.53−5,000=244,141.86

(Repeat this for 12 months)

Year 2:

• Withdrawal amount increases to ₹5,300 per month.
• Interest earned is calculated each month based on the remaining balance at the end of Year 1.

Year 3:

• Withdrawal amount increases to ₹5,618 per month.
• Interest earned is calculated each month based on the remaining balance at the end of Year 2.

Total Invested = ₹250,000

Total Withdrawal:

Total Withdrawal=5,000×12×1+5,300×12×1+5,618×12×1=₹191,016

Final Remaining Amount:

After applying the formula for each month, the Final Remaining Amount will be ₹116,206.

SWP Calculator With Inflation Schedule table

Final words

An SWP Calculator with Inflation helps investors withdraw money from the mutual fund investment it helps investors to understand how much money grows and the last withdrawal after inflation adjustment, this is the best SWP calculator that has multiple features such as charts, tables, and expected return, this is a reliable tool for the retirement planning, this is free online SWP calculator for everyone no need to download ad software or app, use can say that this is a mutual fund SWP calculator that helps mutual fund investor to plan their withdrawal based on the investment corpus.