Want Regular Income?Use Systematic Withdrawal Plan
Want Regular Income?Use Systematic Withdrawal Plan
Written by Shivam Rajmane
Written by Shivam Rajmane
Image credit: Unsplash
Image credit: Unsplash
Systematic Withdrawal Plan (SWP) is an option to withdraw a fixed amount or % of the Portfolio at a predefined frequency. But why is SWP needed?
Systematic Withdrawal Plan (SWP) is an option to withdraw a fixed amount or % of the Portfolio at a predefined frequency. But why is SWP needed?
By using SWP, individuals can meet their regular cashflow or use it for specific purposes like child’s education, parent’s needs, etc.
By using SWP, individuals can meet their regular cashflow or use it for specific purposes like child’s education, parent’s needs, etc.
Setting up SWP is similar to subscribing to SIP. Investors have to decide the amount and duration.
Setting up SWP is similar to subscribing to SIP. Investors have to decide the amount and duration.
Let’s take an example, 12% returns, If Investor decides to withdraw 8%, then remaining 4% will be continuously compounded.
Let’s take an example, 12% returns, If Investor decides to withdraw 8%, then remaining 4% will be continuously compounded.
SWP is best suited for:
Hybrid funds and Balance Advantage funds, popular for constant returns with low volatility.
SWP is best suited for:Hybrid funds and Balance Advantage funds, popular for constant returns with low volatility.
These two types of funds are a combination of equity and debt, which results in its low volatility nature.
These two types of funds are a combination of equity and debt, which results in its low volatility nature.
SWP is often opted by retired or near-retiring individuals. Investors who are in the accumulation phase, generally resist it, due to decreasing compounding rates.
SWP is often opted by retired or near-retiring individuals. Investors who are in the accumulation phase, generally resist it, due to decreasing compounding rates.
Disclaimer: The content of this web-story is for informational purposes only. Please consult a SEBI-registered investment advisor before making any investment decision.
Disclaimer: The content of this web-story is for informational purposes only. Please consult a SEBI-registered investment advisor before making any investment decision.