Outlook Money
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.
SWPs provide a fixed payout so that the retired person will not face fluctuations in his or her expenses due to market volatility.
You can customize your withdrawal amount and frequency according to your financial needs.
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.
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.