Retirement : The average age of people is increasing. Everyone has to retire from their job or business one day or the other. Those who are covered under the Old Pension Scheme in government jobs have no problem. But those who are not covered by it or are about to retire from private jobs or business have lines of worry on their foreheads. They also need a certain amount every month to fulfill their life's needs. If they come to know about Systematic Withdrawal Plan in Mutual Funds, then it can give them the pleasure of monthly pension.

This is how you can choose Systematic Withdrawal Plan

If you choose Systematic Withdrawal Plan, you have to keep some units of the mutual fund in reserve for this. The fund manager arranges money for you every month by selling them. A strategy has to be adopted to convert it into regular cash flow. You can also withdraw money from it on quarterly, half-yearly or yearly basis. Withdrawing a large amount at once negates the possibility of good returns from your investment in future. On the other hand, withdrawing money at regular intervals also keeps your investment growing. You keep getting returns and your needs are also fulfilled. Systematic Withdrawal Plan gradually redeems your mutual fund units while maintaining your investment intake. It keeps providing consistent returns from the rest of your portfolio according to the market performance.

How SWP works

It is important to know how SWP or Systematic Withdrawal Plan works. Units are sold from your mutual fund based on the withdrawal amount you choose on a monthly, half-yearly or yearly basis. If you decide to withdraw Rs 10,000 every month, then units of the same value are sold from your mutual fund every month based on that amount.