Monthly Income from ₹5.00 crore — SWP Plan

Why SWP beats an FD for retirement income

FD interest is taxed at your slab rate in full, every year. An SWP from an equity or hybrid fund is a redemption, not income — only the capital gain portion inside each withdrawal is taxable, and at 12.5% long-term rather than 30%.

On ₹5.00 crore, that difference in tax treatment alone is often worth ₹1-2 lakh a year, which is why SWP has become the default retirement income structure in India.

Sequence of returns risk is the real danger

The 4% rule works on average. It fails when a bad market arrives in the first few years of withdrawal, because you are selling units at depressed prices and permanently shrinking the base that has to recover.

The standard defence is a bucket structure: keep 3 years of withdrawals in liquid and short-duration debt, the next 7 years in hybrid, and the remainder in equity. You then never have to sell equity into a crash.

• Review the withdrawal amount annually, not monthly.
• Raise the withdrawal with inflation, but skip the increase in years the portfolio fell.
• Keep an emergency buffer outside the corpus so a medical event never forces a large redemption.

Inflation will erode this income

₹1,66,667 a month is comfortable today. At 6% inflation it buys what ₹93,066 buys today, ten years in. A sustainable plan must let the withdrawal rise roughly with inflation, which is exactly why you draw 4% rather than the full 9% return.