A systematic withdrawal plan (SWP) lets investors withdraw a fixed amount from their mutual fund at regular intervals, offering a steady cash flow.
Investors choose withdrawal amounts and frequency (monthly & quarterly). Fund units are sold to provide cash, ensuring liquidity while keeping the rest invested.
SWPs offer predictable income, tax efficiency, and flexibility. They help manage post-retirement cash flow or supplement regular income without depleting investments.
SWP withdrawals may incur capital gains tax, calculated based on the investment period. Long-term and short-term gains have different tax rates.
Select an SWP based on your financial goals and cash flow needs. Consider the fund's performance and tax implications to optimise benefits.
Thanks for reading!
See next