₹1 cr in retirement? How it can become ₹2.75 cr while you keep spending

Why SWPs are becoming the go-to retirement planning tool for Indian investors

Most of us grow up believing that retirement is the stage of life where we stop earning, dip into our savings, and hope the money lasts as long as we do. For many, this thought brings more anxiety than comfort. After all, with rising medical costs, inflation, and longer life expectancy, who wouldn’t worry about their nest egg running out too soon?

 

But what if retirement didn’t have to mean simply spending down savings? What if your money could give you a paycheck every month, just like a salary, while still growing quietly in the background? That’s the promise of a Systematic Withdrawal Plan (SWP)—a strategy that is increasingly being used by retirees to make their money work harder.

 

 

What is an SWP?

 

A Systematic Withdrawal Plan is a facility offered by mutual funds that allows you to withdraw a fixed sum at regular intervals—monthly, quarterly, or annually—while the rest of your corpus continues to remain invested. Think of it as creating a personal pension from your own savings, except it can be structured to grow with inflation.

 

Vijay Maheshwari, a Chartered Wealth Manager explains why SWP can make retirement exciting:

 

A Retirement Scenario

 

Let’s take the case of someone retiring with a corpus of ₹1 Crore, invested in a well-diversified mutual fund.

 

They begin by withdrawing ₹50,000 every month.

 

To ensure that inflation doesn’t eat into their purchasing power, they increase the withdrawal by 7% each year.

 

At first glance, this may seem risky—after all, they are drawing down money every month. But the results after a decade can be eye-opening.

 

The Results After 10 Years

 

 Total withdrawals made: ₹80 Lakhs

 

 Current monthly withdrawal: ₹1,00,000

 

 Remaining corpus: ₹2.75 Crores

 

You not only spent ₹80 Lakhs on living expenses, but your original wealth grew nearly threefold—leaving you with more financial security than you started with.

 

Over 10 years, this retiree would have withdrawn ₹80 Lakhs in total, with their monthly payout doubling to ₹1,00,000 by the end of the period. And yet, instead of their savings shrinking, their corpus would have grown to around ₹2.75 Crores.

 

This is the magic of compounding working alongside disciplined withdrawals. As long as the portfolio’s average annual returns exceed the effective withdrawal rate, the wealth continues to grow even as you spend.

 

The Secret Behind It

 

The math is simple:

If your withdrawal rate < investment compounding rate, your money continues to grow even as you withdraw.

 

That’s what makes SWP powerful—it turns your retirement fund into a self-sustaining income engine.

 

Takeaway

• Don’t just save for retirement.
•  Design it so your investments give you income + growth together.
•  SWP = Smart. Simple. Sustainable.

Source: Vijay Maheshwari

 

 Disclaimer: Mutual Fund investments are subject to market risks. The illustration above is for educational purposes only and actual results may vary. Please consult a financial advisor before investing.