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Finance
Simulate a Systematic Withdrawal Plan month by month to see how long a corpus lasts when you withdraw a fixed amount every month while the remainder keeps earning a return.
Each month, the corpus first grows by the monthly-equivalent of your expected annual return, and then the fixed monthly withdrawal is subtracted: balance_next = balance × (1 + monthly rate) − monthly withdrawal. This is the mirror image of a SIP's accumulation loop — growth happens first, withdrawal happens second — and it's structurally similar to the Runway Calculator's month-by-month depletion simulation, though the update rule genuinely differs: runway models a shrinking net burn against a fixed cash pile, while SWP models compounding growth against a fixed, unchanging withdrawal. The simulation is capped at 480 months (40 years) to bound the computation; if the corpus hasn't depleted by then, the result is labeled '480+' rather than an exact but misleading number. Assumptions: monthly compounding, a constant assumed annual return held flat for the whole simulation (real returns vary), and no taxes or fund charges deducted from either the corpus or the withdrawals.
An SWP is the reverse of a SIP: instead of investing a fixed amount every month, you withdraw a fixed amount every month from an existing corpus (typically a mutual fund investment), while the remaining balance stays invested and continues earning a return.
Yes, if your withdrawal rate is well below the assumed return rate — the growth added each month outpaces the withdrawal subtracted, so the balance can rise over time even with regular withdrawals. This is a genuine and interesting behavior of the model, not a mistake.
It means the corpus hadn't depleted within the calculator's 40-year (480-month) simulation cap — effectively, at the given withdrawal and return rates, the corpus is sustainable well beyond a typical planning horizon, not that it lasts forever.