SWP Calculator (Systematic Withdrawal Plan)
Enter the corpus, monthly withdrawal and expected return to plan a systematic withdrawal.
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SWP Calculator (Systematic Withdrawal Plan) by TheCalcTools
How the SWP Calculator (Systematic Withdrawal Plan) works
Each month the corpus earns the monthly return and then the withdrawal is paid out. After n months the balance is C × (1 + i)^n − W × ((1 + i)^n − 1) ÷ i.
If the withdrawal is no more than the monthly return (C × i), the corpus never runs out. Otherwise it lasts n = −ln(1 − C × i ÷ W) ÷ ln(1 + i) months. Real returns vary, and a bad early market makes a big difference.
The formula
Worked example
Using the default values shown in the calculator:
| Starting corpus | $5e+06 |
|---|---|
| Monthly withdrawal | $40000 |
| Expected annual return | 8 % |
| Period to check (years) | 10 |
- Withdrawing 40,000 a month from 5,000,000 at 8%: the corpus lasts 22 years 5 months.
- After 10 years $3,780,360 is left.
Result:
| Balance after the period | $3,780,360 |
|---|---|
| Total withdrawn in the period | $4,800,000 |
| Corpus lasts | 22 years 5 months |
| Withdrawal rate per year | 9.60% |
| Monthly withdrawal that never depletes the corpus | $33,333 |
Frequently asked questions
What is a safe withdrawal rate?
US research such as the Trinity study found about 4% a year lasted 30 years in most historical periods for a stock and bond portfolio. With higher inflation or longer retirements, many plan for less.
Sources and further reading
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This calculator gives estimates for information only. It is not financial advice, and your lender's or provider's figures will govern. Rates, fees and rules vary. See our disclaimer.