Many investors look for a way to generate regular monthly income without exhausting their hard-earned savings. One such option offered by mutual funds is the Systematic Withdrawal Plan (SWP). Under this method, you invest a lump sum amount and withdraw a fixed sum at regular intervals—usually monthly—while the remaining money stays invested and continues to grow.

The biggest advantage of an SWP is that if market returns are decent, your capital does not erode quickly, and in some cases, it can even keep growing despite regular withdrawals.

What is an SWP and how does it work?

In an SWP, you:

• Invest a lump sum in a mutual fund (generally equity or hybrid funds)

• Decide a fixed monthly withdrawal amount

• Withdraw that amount every month, while the balance earns market returns

This strategy is often used by retirees or individuals looking for predictable cash flow.

How to get ₹50,000 per month through SWP?

If your monthly requirement is ₹50,000, your annual withdrawal will be ₹6 lakh. The key factor here is the average annual return on your investment.

Here’s how much corpus you may need based on different return assumptions:

• At 8% annual return
  You will need approximately ₹75–80 lakh to comfortably withdraw ₹50,000 per month without rapidly depleting your principal.

• At 10% annual return
  A corpus of around ₹60–65 lakh can be sufficient.

• At 12% annual return
  You may need about ₹50–55 lakh to sustain the same monthly income.

Higher returns reduce the required investment, but they also come with higher market risk.

Don’t have a lump sum? Build it through SIP

If you don’t have ₹50–80 lakh available right now, you can still reach this goal gradually using a Systematic Investment Plan (SIP).

Here’s how long it may take to build a corpus of ₹80 lakh assuming a 12% annual return:

• 15-year plan
  Monthly SIP of around ₹17,000–18,000

• 20-year plan
  Monthly SIP of around ₹9,000–10,000

Once this corpus is ready, you can shift it into an SWP and start withdrawing ₹50,000 per month.

Who should consider an SWP?

• Retired individuals looking for regular income

• People planning early retirement

• Investors who want predictable cash flow while staying invested in the market

Important points to remember

• Returns are not guaranteed; markets fluctuate

• Equity-based SWPs work best over the long term

• Inflation should be considered while deciding withdrawal amounts

• Periodic review of the plan is essential