How to Calculate a Systematic Withdrawal Plan

See what the balance can actually pay

A withdrawal schedule can request more than an investment has available. Track the requested and modeled paid amounts separately to see when the plan needs another funding source in the scenario.

What an SWP projection measures

A systematic withdrawal plan (SWP) takes regular amounts from an invested balance. This model uses one opening balance and one fixed request per complete model month.

The portfolio pays withdrawals from its available balance. Amounts paid can draw down principal even when modeled growth is positive.

Compare a withdrawal budget against the balance

Run the same withdrawal amount under positive, zero and negative rates. Check how soon the plan falls short and whether the shortfall is partial or the full request. This tests assumptions without assigning them probabilities.

SWP formula and timing

Convert the effective annual decimal return A to monthly factor f = (1 + A)^(1/12). At beginning timing, pay up to the opening monthly balance and multiply what remains by f. At end timing, multiply the balance by f first and then pay up to that grown balance.

Paid = min(request, available balance)

Follow a partial final payment

Start with 1,000, request 400 a month for three months and assume zero return. The payments are 400, 400 and 200. Requested withdrawals total 1,200, paid withdrawals total 1,000 and unmet withdrawals total 200. Depletion and first shortfall both occur in month 3.

For an exact-depletion comparison, request 500 instead. Month 2 pays the full 500 and empties the account. In a three-month plan, the first shortfall is month 3 and pays zero.

1. Enter 1000 as opening balance and 400 as the monthly request.
2. Enter zero effective annual return and three complete months.
3. Check the three withdrawal totals and the amount paid in the first shortfall month.

Read depletion and first shortfall separately

Opening balance plus signed modeled growth less paid withdrawals equals ending balance. Requested less paid equals unmet. A full payment can deplete the portfolio exactly, so a shortfall might only appear in a later month.

When the horizon ends at an exactly funded last withdrawal, the balance is zero with no shortfall inside that horizon.

Enter and compare both timings

Enter opening balance, fixed monthly withdrawal request, effective annual percentage and whole months. Choose beginning or end timing. Read the ending balance, withdrawal totals and first-shortfall payment together.

At a negative rate, withdrawing before the loss may preserve more of the first cash payment. At a positive rate, waiting until month end keeps the cash invested through that month.

Choose the tool for the direction of cash flow

The SIP calculator adds monthly contributions. The Lump Sum Mutual Fund Calculator projects a single deposit held throughout the horizon. The SWP calculator models withdrawals from a starting portfolio with no new contributions.

Use a constant rate over equal periods

Each month is an equal period. Both timing options label the first request month 1. If a request exceeds available funds, pay the available balance. Zero horizon makes no requests, and an opening zero balance is already empty.

Real investment returns vary. The order of gains and losses matters because withdrawals change the balance exposed to later returns.

Respect the modeled limits

Enter 0 through 10^12 for both monetary inputs, 0 through 1,200 months and an effective annual percentage above −100% and at most 100%. Inputs allow 12 fractional digits. Arithmetic uses at least 100 significant digits, flags unresolved thresholds and rejects ending balances above 10^30.

Display rounds separately. A very small positive shortfall may display as less than a currency cent while still triggering the month indicator.

Avoid treating a withdrawal as a gain

Keep requested amounts separate from actual modeled payments and growth. A positive ending balance in this scenario does not establish a safe withdrawal amount.

Add the remaining balance and paid withdrawals, then subtract the opening balance to reconcile signed growth. The tool tracks that growth before display rounding.

Use local terminology and a consistent currency

SWP is common in India. Portfolio withdrawals and drawdown are useful terms in the USA, Canada, UK and Australia. Select USD, CAD, GBP, AUD or INR to match the inputs. Local pension account rules, tax and statutory withdrawal amounts are outside the calculation.

Educational scope

Educational constant-return model. It excludes dates, real market paths, fees, taxes, inflation, FX and product or account rules. It does not guarantee income or provide personalized investment advice.

Frequently asked questions

Sources and review

Sources reviewed Nov 10, 2026. Consult current local rules before relying on time-sensitive information.

• Zerodha SWP calculator
• Groww SWP calculator
• IRS retirement distribution FAQs
• MoneyHelper pension drawdown
• Ontario Securities Commission RRIF education
• ASIC account-based pension calculator