A withdrawal that rises every year

A flat SWP pays the same amount in year twenty as in year one, while everything it pays for costs more. A step-up SWP raises the withdrawal by a fixed percentage every twelve months. The calculator shows what that does to the corpus — the balance left, the total you draw, the size of the last withdrawal — and the highest starting amount that still lasts the whole period.

Your numbers

Change anything; the result updates as you type.

Result

A rising withdrawal is paid for by what the corpus keeps earning.

Every step-up comes out of the return on the money that stays invested. MindForge publishes the backtest behind each of its three strategies, and the two paid ones trade in their own broker-verified Zerodha accounts — the kind of evidence a withdrawal assumption deserves.

See the strategies

How a step-up SWP is calculated

Month by month, as the flat SWP calculator does it: the balance grows by one twelfth of the annual return, then the withdrawal is taken out. Every twelfth month the withdrawal is raised by the step-up percentage. If a month's balance cannot cover the withdrawal, what is left is paid out and the plan ends there — the calculator reports that month rather than a negative balance.

balance = balance × (1 + i) − withdrawal, each month · withdrawal × (1 + step) every 12 months

What the step-up costs

At the defaults — ₹1 crore at 9%, starting at ₹50,000 a month for twenty years — a flat SWP leaves ₹2,66,97,172. Raising the withdrawal 5% a year leaves ₹1,21,83,955, and by the last year the withdrawal is ₹1,26,348 a month. The step-up draws ₹1,98,39,572 in total instead of ₹1,20,00,000, and the difference comes out of money that would otherwise have compounded.

The highest starting withdrawal

The calculator also solves the plan backwards: the largest first withdrawal that, rising at your step-up, runs the corpus down to exactly zero in the final month. At the defaults that is ₹62,716 a month. Start below it and money is left over; start above it and the plan ends early.

What this model does not capture

Sequence risk. A constant return is the friendliest assumption a withdrawal plan can get. A fall in the early years, while withdrawals continue, sells more units at lower prices and can end the plan well before the calculator says.
Inflation. Every figure here is in future rupees. To see what each year’s withdrawal and the balance are worth in today’s money, use the step-up SWP with inflation calculator — the same plan, with an inflation rate.
Tax. Each withdrawal from a mutual fund is a redemption, and the gain portion is taxable. The figures here are before tax.

Questions

What step-up should I use for a withdrawal?

One that matches how your costs rise. For living expenses that is usually close to inflation, and the step-up SWP with inflation calculator shows what each year's withdrawal is worth in today's money. A higher step-up draws the corpus down faster; a lower one lets the withdrawal fall behind prices.

When does the withdrawal go up?

Every twelve months. Months 1 to 12 pay the starting amount, months 13 to 24 pay it raised once, and so on, so a 20-year plan raises it 19 times.

What does the highest starting withdrawal mean?

The largest first-year monthly amount that, raised by your step-up every year, lasts exactly the full period at the return you entered. It assumes that return arrives every month without fail, so treat it as a ceiling, not a target.

Is the withdrawal taken at the start or the end of the month?

At the end, after that month's growth, the same convention as the SWP calculator. Taking it at the start would run the corpus down slightly faster.

Other calculators

Fee Calculator What a percentage-of-AUM fee costs against a flat subscription. SWP Calculator What a monthly withdrawal does to a corpus, and how long it lasts. Step-Up SWP with Inflation A rising withdrawal, with every figure also in today’s money. Retirement Calculator The corpus your expenses need, and the monthly SIP that builds it. Step-Up SIP Calculator A SIP that rises with your income — and what it is worth after inflation. FD Calculator A fixed deposit’s maturity, and what it earns after tax and inflation. Inflation Calculator What something will cost in future, and what a future sum is worth today. All 16 calculators Grouped by the question each one answers.