How SWP Is Calculated: Return Timing, Withdrawals and Balance
Trace the SWP calculator's monthly return conversion, return-before-withdrawal order and balance updates.
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This article is for education and general information. See the Financial Disclaimer before using it for an important decision.
The annual input becomes a monthly rate
For this calculator, the entered annual percentage is divided by 12 and then by 100. The resulting monthly rate is used for each modeled month. This describes the ArthaSiddhi model; other products or platforms may use different conventions.
Try the same assumptions in the SWP Calculator.
Return is applied before the monthly withdrawal
Each iteration first applies the monthly-equivalent return to the current corpus. The requested withdrawal is then deducted. If the requested amount is larger than the available balance, the withdrawal is limited to that balance and the corpus becomes zero.
Timing example: ₹1,000 becomes ₹1,010 before withdrawal
With ₹1,000, a ₹1,010.00 monthly withdrawal, an entered 12% annual return and a one-year period, the first monthly rate is 1%. The engine moves from ₹1,000.00 to ₹1,010.00, then withdraws ₹1,010.00 and leaves ₹0.00.
The result records 1 withdrawal month and exhaustion before tenure as Yes.
| Total withdrawn | Remaining corpus | Months with withdrawal | Exhausted before tenure |
|---|---|---|---|
| ₹1,010.00 | ₹0.00 | 1 | Yes |
The loop reports actual withdrawals
The model processes up to withdrawal period × 12 months. It counts months with a positive withdrawal, accumulates the amount actually withdrawn, prevents a negative balance and stops after exhaustion.
For an exhaustion case, see Why SWP Corpus Can Run Out.
Frequently asked questions
Is return applied before or after withdrawal?
In the ArthaSiddhi model, the monthly-equivalent return is applied first and the monthly withdrawal is deducted second.
What happens when the balance is smaller than the requested withdrawal?
The final withdrawal is capped at the available corpus, the balance reaches zero and processing stops.
Does every SWP product use this exact timing?
No. This article documents the timing convention used by this calculator only.
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SWP Explained: Withdrawals, Returns and Remaining Corpus
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Why SWP Corpus Can Run Out
See how withdrawal size, starting corpus, tenure and an entered return affect modeled SWP corpus exhaustion.