Systematic investment planning helps individuals identify the right amount they can invest consistently in a dedicated fund or security to create a substantial fund for retirement and other financial purposes. On the other hand, a systematic withdrawal plan enables individuals to identify the best amount they can withdraw from the invested amount at regular intervals to create a fixed income over several years. Through effective use of both SIP and SWP, individuals can create immense wealth and even create a source to generate a fixed and regular income. Moreover, one can even use dedicated SIP and SWP calculators to calculate their SIP and SWP amount accurately and with minimum hassle.
The following article explores the benefits and the best way to use both calculators by individuals:
How to use an SIP calculator effectively
Individuals can use a dedicated SIP calculator to identify the right fixed amount that they can invest in a dedicated fund or security with an expected rate of return to generate sufficient funds for financial purposes. By providing various details like the monthly amount of investment, expected rate of return, investment duration, etc, the calculator can help calculate the future value or the total fund that they can generate through SIP investments. For example, investors with a monthly income of ₹25,000 plan to invest ₹10,000 every month for 20 years in a fund that generates on average 12% returns and can accumulate some of ₹1.05 crores.
Therefore, through the effective use of a SIP calculator, individuals can identify the best SIP investment amount that they can set aside for investments to generate the required amount for fulfilling different financial needs.
How to use a SWP calculator effectively
Individuals through an SWP calculator can easily determine the money which they can withdraw from their invested amount periodically to create a fixed income. By providing various essential details like the initial investment amount, expected rate of return, the amount of withdrawal, and the total frequency of withdrawal, the SWP calculator can help estimate the period for which the corpus may last, helping individuals to make the right decision. For example, an individual with a plan to withdraw a sum of ₹30,000 per month from a corpus of ₹50 lakhs with an annual return of 8%, can use the available sum for 20 years. Therefore, an SWP calculator can help individuals identify the amount they can withdraw from their generated corpus to ensure it lasts for the longest period possible.
Conclusion
By using an SIP and SWP calculator, individuals can grow their wealth over time and a certain the right amount which they can withdraw without eroding their principal amount completely. By using these tools effectively, individuals can make the right decision regarding their SIP investments and withdrawal. Moreover, they can generate immense wealth and create a sustainable stream of income that can last for a long period. Making the calculations easier and free from any errors, both calculators can help with hassle-free decision-making and offer clear insights for wealth accumulation and sustainable withdrawals.
