Today’s topic of discussion is systematic withdrawal plan or SWP. Most of the time, we have a wrong assumption that only a government job doing person can have at the spare time of their life. But, is financial support possible for all of us?
Multi captual Fund
Today we will discuss about SWP or Systematic Withdrawal Plan which every month we can deposit some amount of money from our investment.
How SWP is working?
SWP is a type of process where you can deposit a certain amount of your investment in a regular period of time. The amount you will invest from that in every month or in every period of time a certain amount will be deposit to your bank account. It can be your retire life money or could be a new source of income in your retire life.
Assume, you have lump sum 50 lakh rupees investment on a mutual fund. Now you want to take out 25,000 rupees every month so as per the mutual fund annual return rate which is 6% on a year at first you will take 25,000 Rupees but second year the money you can withdraw every month will be 26,500 for the next following year. In 20 years your invested 50 lakh rupees can become 1 core 39 lakh if the annual return is 12%. In this way SWP will give you not only regular income source but also for the long run, more income.
Which facilities you can get in this case?
1. Regular Source Of Income – Every month by withdraw a certain amount of money will solve your necessity.
2. Flexible Benefits – You can Stop or Restart SWP whenever you want.
3. Advantage Of Taxes – Generally in SWP withdrawals are TDS Deduction Free.
4. Stable Income Source.
5. Modification Flexibility – You can change the SWP amount any time.
It is appropriate for whom?
- Mainly it’s suitable for the ones with age bracket of 30-40 or above that, and want extra source of income.
- People approaching retirement or those who wants a secure income stream.
Which can be thought of as its replacement?
It is mainly useful to those who wants to income daily from the mutual funds. On the other hand there are few other options like SWP but there are less of advantages or convenience than SWP. This is a very good long term investment plan with the help of increasing your income in long term. We talked briefly today about the highlights of SWP.
In our next blog posts we will discuss about SWP more, Stay Tuned.