Why Are SWPs Ideal for Retirement?

Outlook Money

What is SWP?

A Systematic Withdrawal Plan (SWP) is an option provided by mutual funds where investors can withdraw a fixed amount of money at regular intervals, monthly, quarterly, or annually. This way, the rest of the investment keeps on growing.

Timed Withdrawals

Regular Income 

SWPs provide a fixed payout so that the retired person will not face fluctuations in his or her expenses due to market volatility.

Flexibility 

You can customize your withdrawal amount and frequency according to your financial needs.

Tax Efficiency 

SWPs offer higher tax efficiency compared to withdrawals from fixed deposits or savings accounts since the withdrawal amount is only taxed by taxing the returns on that amount.

Capital Preservation

If planned appropriately, a SWP helps preserve your capital and simultaneously provides you with a regular income stream, which will be sustainable for long-term retirement needs.

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