Guide to Systematic Withdrawal Plan

Systematic Withdrawal Plan is a facility given through mutual funds by which a depositor can take out a pre-decided sum at the predetermined interval from his/ her investments in selected schemes in a mutual fund. In mutual funds, SWP helps in generating a consistent source of income to pensioners or supplementary income for those with exclusive requirements, for example, meeting children's schooling, steady cash flows to old parents etc. Log on to swpcalculator.com to know more about the plans.

If you wish to take a time off from a job or are soon going to retire, you might be eyeing at numerous investment possibilities which will offer a consistent income.

Normally, to get fixed regular amount later a lump sum is invested. Savings Schemes for Senior Citizens, monthly income plans (MIPs) are some of the popular products in post office monthly income schemes. Mutual funds are a lesser popular option is the systematic withdrawal plans. Not long ago, few funds have also get rid of the exit load on SWPs if you wish to withdraw up to 15-20 percent in the initial year, to urge investors who wish to begin investing in this method. A swp calculator will help you to calculate the exact amount.

All of us may be aware of the systematic investment plan (SIP), where an amount is collected by doing regular investments into a mutual fund. SWP, basically, is contrary to a SIP, where you can often withdraw a set sum of capital from a lump sum invested in funds, i.e., you tell the asset management company (AMC) to release units on a decided date &pay a fixed amount in your bank account. Your number of units and fund value will lessen to the extent of every withdrawal. The sum to be removed& the occurrence quarterly, half-yearly, monthly, or yearly are fixed by the depositor.

For a swp mutual fund calculator, the tax treatment of every withdrawal will be similar as in the case of complete withdrawal ofdebt& equity funds. That's why, for units where the interval of holding has not overlapped twelve months for equity funds, the tax will be applied on short-term capital gains. Short-term capital gains tax applies in debt funds if units are held lesser than thirty-six months, &if held for longer, long-term capital gains tax.

Even ifan SWP offers you consistent income and saves on tax in the long term, you can't open an SWP on schemes where you have a current SIP. Furthermore, variations in returns can hit your investments& SWP. In a market declining, an SWP may eat your principal. Still few financial planners adviseSWP in balanced funds as usually these are less unstable than only equity funds. Find more on www.swpcalculator.com

For more information about swp calculator, please visit www.swpcalculator.com.