Monthly Income from Mutual Funds: How Long ₹50 Lakh Lasts at ₹30,000 a Month (SWP)

₹50 lakh in a mutual fund, ₹30,000 taken out on the same date every month, and after 25 years there is still ₹81.7 lakh in the account. Change one thing, raise the ₹30,000 by 6% every year so it keeps up with prices, and the same ₹50 lakh is empty in 17 years and 1 month. Both answers come from the same calculator at the same assumed 8% a year. The gap between them is most of what you need to know before you take a monthly income from mutual funds.

Prakash Joshi retired in September after 34 years with a private auto-parts maker in Indore. There is no pension. His EPF, gratuity and an old FD come to ₹50 lakh, and his son keeps telling him to "start an SWP". Before he signs any form, Prakash wants three answers: how the money actually comes out each month, how long it will last, and what happens if the market falls the year after he starts. This post runs his numbers on the site's SWP calculator. The same steps work if you are 45 and want ₹30,000 a month as a second income on top of a salary or a shop.

What an SWP is, in plain words

SWP stands for systematic withdrawal plan. You put a lump sum into a mutual fund scheme and give the fund house a standing instruction: pay me this much on this date every month, which is how AMFI's investor education site describes it. On that date the fund sells just enough of your units to make the amount and credits it to your bank account.

People searching "SWP kya hai" usually get one line back: an SIP in reverse. With an SIP you buy units every month. With an SWP you sell them. Three things make it different from FD interest:

• You choose the amount. You can raise it, lower it or stop it any time.
• It isn't interest. Each payment is partly your own money coming back and partly the gain on it. That matters a lot for tax.
• Nothing is promised. If the fund does badly, the ₹30,000 still arrives, but more units are sold to pay it and the balance shrinks faster.

If SWP is a new word for you, the plain basics, with ₹20 lakh and ₹15,000 a month as the example, are in SWP kya hai.

What happens to your units every month

Say Prakash buys at a NAV of ₹25. ₹50 lakh gets him 2,00,000 units. The calculator assumes the fund earns a steady 8% a year, which is 0.667% a month, and pays ₹30,000 at the end of each month. If the NAV grew in that smooth way, his statement would look like this:

The number of units only goes down. After 25 years Prakash holds less than a quarter of what he started with. Yet the rupee value goes up, because each unit left is worth more. And as the NAV rises, fewer units are needed for the same ₹30,000: 1,192 in month 1, only 163 in month 300. When the NAV falls, the opposite happens, and that is where the trouble starts.

Read every number here as "what happens if 8% turns out to be the long-run average".

₹50 lakh at ₹30,000 a month: what is left after 10, 20 and 25 years

Here is the calculator's year-by-year result for ₹50,00,000 invested, ₹30,000 a month, 8% a year, no yearly increase.

The money doesn't run out. It grows. 8% a year on ₹50 lakh is about ₹33,333 a month, and Prakash takes ₹30,000. As long as he takes less than the fund earns, the balance creeps up. Take exactly ₹33,333 and the ₹50 lakh stays at ₹50 lakh for ever, on paper.

Over 25 years he takes out ₹90 lakh in all, almost twice what he put in, and still leaves ₹81.7 lakh. Retail inflation was 5.54% in September 2026, as per MoSPI's CPI release, and most households plan with 6% because medicines and services rise faster than the basket. At 6%, ₹30,000 in year 25 buys what about ₹6,990 buys today. The ₹81.7 lakh left at the end is worth about ₹19 lakh in today's money. Rising prices did the damage, not the fund.

How much can ₹50 lakh pay? Turn the dial

Here is the same ₹50 lakh at 8% with different monthly amounts. "Per year" is the withdrawal as a share of the starting ₹50 lakh.

The line sits near ₹33,333. Below it the money outlives you. Above it the money runs down, slowly at first and then fast. ₹40,000 is only ₹10,000 more than ₹30,000, but it turns "keeps growing" into 22 years. The return you assume matters just as much. Here is ₹30,000 a month at four rates:

8% is the calculator's default, an assumption for a mix of debt and equity, not a forecast. If Prakash keeps everything in debt funds, 6% or 7% is the more careful guess. More equity might average 10%, but with deeper falls along the way.

What a yearly rise in the withdrawal does

This is the real retirement question. Prakash's ₹30,000 pays for groceries, electricity, his wife Sunita's medicines and the society maintenance. At 6% inflation the same life costs about ₹50,700 a month by year 10, so the SWP has to rise. The calculator has a box for it ("Increase withdrawal every year by"). Same ₹50 lakh, same 8%:

A 6% rise takes the same ₹50 lakh from "keeps growing" to 17 years. Retire at 60 and the account is empty at 77. Notice too that the balance after 10 years looks fine in every row. The money doesn't fade evenly. It holds up for a decade and then drops fast, because the withdrawal keeps climbing while the shrinking balance earns less. Three ways around it, and most people need a bit of each:

• Start lower. With a 6% yearly rise, ₹25,000 a month lasts 21 years 5 months and ₹20,000 lasts 28 years 10 months.
• Raise by less than inflation. A 3% rise lasts 24 years 7 months.
• Have other income, or a bigger corpus. The retirement calculator shows how large a corpus a given monthly need really takes.

The longer version, ₹1 crore with a withdrawal rising 6% a year and what a safe withdrawal rate looks like in India, is in an upcoming post on SWP with inflation.

Which kind of fund people use for an SWP

You can run an SWP from almost any open-ended scheme. What matters is how far the fund can fall in a bad year. SEBI's list of fund categories, last revised in its circular of 26 February 2026, is the menu. This site doesn't name funds, so here are the types, from calmest to bumpiest:

• Liquid, money market and ultra short term debt funds. Small, steady returns, rarely a loss. Good for the next year or two of withdrawals, poor for 20 years.
• Short term debt and corporate bond funds. A little more return, small ups and downs when interest rates move.
• Conservative hybrid funds. 10% to 25% in equity and the rest in debt. Mostly a debt fund with a little growth.
• Equity savings funds. At least 65% in equity on paper, but only 15% to 40% is open to market moves. The rest is hedged or in debt.
• Balanced hybrid and dynamic asset allocation funds. Balanced hybrid holds 40% to 60% in equity. Dynamic asset allocation funds, many sold under the name "balanced advantage", shift between equity and debt by their own rules.
• Aggressive hybrid, equity and index funds. 65% or more in equity. The most growth over 15 years and the deepest falls along the way.

A common setup is not one fund but three, split by when the money is needed: about two years of withdrawals in a liquid or ultra short fund, with the SWP running from there, the next few years in a conservative hybrid or short term debt fund, and the long-term part in something with more equity. Once a year, ideally after a good year, money moves down to refill the near bucket, the same step-by-step transfer as an STP run the other way.

Two settings on the form matter. Choose the growth option, not IDCW (the old "dividend" option): an IDCW payout is decided by the fund and can be cut, an SWP amount is decided by you. An upcoming post on SWP vs IDCW will go into the difference. And check the exit load. Many equity and hybrid schemes charge one if units are sold within a set period after purchase, often the first year, so an SWP from such a fund in month one loses a little on every instalment.

Sequence risk: when the market falls early

Averages hide the order in which things happen. In an SIP an early fall is good news, because you buy cheap units. In an SWP it works the other way. You are forced to sell cheap units to pay the month's ₹30,000, and those units are gone before the recovery comes.

Here is ₹50 lakh at ₹30,000 a month and 8% a year, except for one fall of 20%. The fall is applied to the balance and the calculator is run again from the lower figure.

Same fall, same 8% afterwards, only the timing differs. A fall in the first year leaves ₹8.3 lakh at 25 years. The same fall ten years later leaves ₹44.6 lakh, because by then the fund had grown and fewer units were being sold each month.

The last row is the reason for the buckets above. With only part of the money in equity, the same crash takes less out, and with two years of withdrawals already in a liquid fund, no equity units are sold while they are down. What helps in practice:

• Keep one to two years of withdrawals out of equity, always.
• After a bad year, skip that year's raise, or take a little less for a few months.
• Don't move everything to an FD after a crash. That turns a paper fall into a real one.
• Don't start an all-equity SWP in the year you retire. The early years carry the most risk.

Tax on each instalment, in short

Only the gain inside each ₹30,000 is taxed, not the whole payment. In month 1, Prakash's ₹30,000 holds just ₹199 of gain and the rest is his own money coming back. By month 120 the gain part is ₹16,484, and by month 300 it is ₹25,913, because the units being sold were bought at ₹25 and are now sold at ₹183.50.

For an equity-oriented fund (65% or more in equity, including equity savings and aggressive hybrid funds), units sold within 12 months pay short-term gains tax at 20% under section 196 of the Income-tax Act 2025. After 12 months it is long-term, taxed at 12.5% only on gains above ₹1.25 lakh in a year under section 198. Add 4% cess to both. The table below assumes all of Prakash's ₹50 lakh sat in one equity-oriented fund, bought in one go, with no other equity gains in the year, and that other income (a pension, rent, FD interest) already uses up the ₹4 lakh basic exemption of the new regime:

The working for year 10: gain ₹1,91,730, less the ₹1,25,000 exemption, leaves ₹66,730. At 12.5% that is ₹8,341, and with 4% cess ₹8,675, on ₹3,60,000 received in the year.

Prakash himself has no pension and no other income. A resident can set the unused part of the basic exemption against these gains, under section 196(2) for short-term and section 198(3) for long-term gains. His SWP gains stay below ₹4 lakh in every year shown, so in his case the tax is nil throughout.

Debt funds work differently. A fund with more than 65% in debt and money market instruments is a "specified mutual fund" under section 76, and gains on its units bought from 1 April 2023 are always short-term, added to your income and taxed at your slab rate, however long you hold them. That covers liquid funds and conservative hybrids. Funds between the two lines, like balanced hybrids, have rules of their own. The full working, with several purchases sold first-in-first-out, the in-between funds and how it compares with TDS on FD interest, is in an upcoming post on SWP tax rules. To see which slab your other income puts you in, try the income tax calculator.

If you are still earning and want a second income

Some people wanting monthly income from mutual funds are 45, with a salary or a shop, and need ₹20,000 or ₹30,000 a month for a parent's care or hostel fees. The arithmetic is the same, but three things change. The money has to last 40 years or more if it is also meant for retirement, which argues for a smaller withdrawal: ₹20,000 a month from ₹50 lakh at 8% still leaves ₹74.4 lakh after 10 years and ₹1.77 crore after 25. Your slab is likely higher, so debt fund gains cost more. And if your salary already covers the expense, ask why you are selling units at all. An SWP taken just because it is there is how a ₹50 lakh retirement fund becomes a ₹20 lakh one by 60.

What Prakash set up

Prakash and Sunita own their flat and have no loans. They need ₹30,000 a month now and want it to rise. Prakash settled on a 3% yearly rise, not 6%, knowing that lasts about 24 years and 7 months at 8%. If the funds do worse, the flat is the last line of defence.

He split the ₹50 lakh by when it will be needed:

• ₹7.2 lakh, two years of withdrawals, in a liquid fund. The ₹30,000 SWP runs from here.
• ₹15 lakh in a conservative hybrid fund, the money for years three to six.
• ₹27.8 lakh in a fund with more equity, which he won't touch for at least five years.

Every April he will move one year of withdrawals into the liquid fund from whichever of the other two did better, and skip the yearly raise in any year the equity part is down. He also ran the bad case on the calculator: at 6%, ₹30,000 flat lasts 29 years 11 months. He kept that page.

His brother-in-law, a retired bank officer, still says it should all go into a monthly-interest FD. That comparison, same ₹50 lakh, after tax, over 20 years, is next week's post: SWP vs FD for monthly income. For the FD side as it stands today, the post on senior citizen FDs has the rates and the TDS rules.

For general information, not as investment or tax advice. Rates and rules change, so check the latest before you decide. Tell us if something here is out of date. Editorial policy · Contact