SWP or Systematic Withdrawal Plan as we say is an option of withdrawal from your Mutual Fund investment. In SWP the money is automatically deducted or systematically withdrawn on a regular basis (fortnightly, monthly, quarterly) as per instructed. At the set, a predetermined date, and money is sent back to your registered bank account.
You further have the option to withdraw a particular number of units or decided amount, you can even customize the cash flow as per your requirement. In SWP you can even choose to either withdraw just the capital gains on your investment or a fixed amount. This way you will not only have your money still invested in the scheme, but you will also be able to access regular income and returns. The money that you withdraw can be used to reinvest in some other fund or can be retained by you in the form of cash.
Who and How you can USE it
Freelancer: If you are just left from the full-time workforce and started with freelance jobs than you can set up SWP for a regular flow of income.
College fees and Pocket Money: From your built corpus of children education you can setup SWP for Children School/ college fees and also give pocket money to your grown up children in a systematic way without fail.
Job Loss: At this stressful and hard time, if you have created Emergency fund than you can overcome the fear of regular income by setting up SWP.
Planned Sabbatical: During pregnancy leave or study leave if you have kept aside some corpus than you can set up SWP and pay your self a monthly salary.
NRI for Resident Parents: Withstanding instructions NRI can set up SWP and the withdrawal amount can be sent back to Parents Bank Account every month automatically.
Retiree: This is a good gift during your retirement years. You can start monthly income from your planned corpus and also get wealth appreciation at the same time. Congratulations you have created a much better Guaranteed Monthly Pension plan your self !!!
You Just need a corpus to start SWP plan. Proper planning will definitely help you to generate good corpus and Planned withdrawal by SWP as per your future needs and also create wealth at the same time.
You can try in this android app CLICK HERE TO DOWN LOAD
PS: Be cautious on what the amount you are withdrawing monthly/quarterly or yearly etc. It cannot be more than what you are getting per year like if you are getting 12% PA and you are withdrawing 15% PA than you will eat up your capital.
