Retirement: SWP from Mutual Funds for Pension-Like Monthly Income

• SWP (Systematic Withdrawal Plan) from mutual funds offers a flexible and reliable retirement income, allowing regular withdrawals while the remaining corpus stays invested.
• Unlike SIPs, SWP involves withdrawing a fixed amount monthly, with the flexibility to adjust or stop withdrawals without penalty.
• Experts suggest a safe annual withdrawal rate of 5-7%, with 4-5% potentially sustaining the corpus for 25-30 years.
• Choosing appropriate funds like Balanced Advantage or Dynamic Asset Allocation funds is crucial for stable returns, and tax is only levied on capital gains, often less than traditional interest income.
• Effective SWP planning involves assessing monthly expenses, determining the required corpus, diversifying investments across funds, and conducting annual reviews.

Why It Matters: SWP offers a flexible, tax-efficient way to generate regular retirement income from mutual funds.