| Year | Opening Balance | Withdrawals | Portfolio Gain | Closing Balance |
|---|
A Systematic Withdrawal Plan (SWP) allows you to withdraw a fixed amount from your investment at regular intervals. This SWP Calculator with Inflation shows how long your money will last while adjusting withdrawals for inflation.
Example SWP Calculation
Total Investment: $1,000,000
Monthly Withdrawal: $5,000
Expected Annual Return: 8%
Expected Inflation Rate: 4%
Results
Your Money Will Last: 27 Years, 4 Months
Total Withdrawn: $2,880,066
Final Portfolio Value: $0
Yearly Breakdown
| Year | Opening Balance | Withdrawals | Portfolio Gain | Closing Balance |
|---|---|---|---|---|
| 1 | $1,000,000 | $60,000 | $77,831 | $1,017,831 |
| 2 | $1,017,831 | $62,400 | $79,170 | $1,034,601 |
| 3 | $1,034,601 | $64,896 | $80,422 | $1,050,126 |
| 4 | $1,050,126 | $67,492 | $81,570 | $1,064,204 |
| 5 | $1,064,204 | $70,192 | $82,598 | $1,076,610 |
Why Use an SWP Calculator with Inflation?
Inflation reduces the purchasing power of money over time. This calculator adjusts your withdrawals to maintain real value, giving you a realistic view of how long your savings will last.
Key Terms Explained
Total Investment: The amount you initially invest.
Monthly Withdrawal: The amount you plan to withdraw every month.
Expected Annual Return: The average yearly growth rate of your investment.
Expected Inflation Rate: The percentage by which your expenses rise annually.
Portfolio Value: The remaining balance in your account after withdrawals and returns.
Frequently Asked Questions (FAQs)
What is an SWP?
An SWP (Systematic Withdrawal Plan) allows you to withdraw a fixed or inflation-adjusted amount from your investment regularly.
Why should inflation be considered?
Inflation reduces your purchasing power, so adjusting withdrawals ensures you can maintain your lifestyle over time.
How long will my money last with SWP?
The duration depends on your investment amount, withdrawal rate, expected return, and inflation rate. This calculator shows the estimated time.
Can I increase my withdrawals later?
Yes, but higher withdrawals will reduce the time your portfolio lasts.
What happens if returns are lower than expected?
Your money will run out faster if actual returns are lower than your assumptions.