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Financial Expert's SWP Advice: Can I Expect Better Returns?

Milind

Milind Vadjikar  |1238 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Apr 22, 2025

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more
Shaming Question by Shaming on Apr 22, 2025Hindi
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Hi....i saw many of videos of financial experts on SWP ..stating better returns ,for example if i invest 1.25 cr in mf expecting a return of 12% and withdraw 1 lakh every month for 15 to 20 years then to my corpus will be same or much more ..if YES plz suggest some best SWP funds

Ans: Hello;

Managing your personal finance by watching YouTube videos of finfluencers can be injurious to your financial health.

Do not fall for it ever because their are vested interests. Keep in mind that if something is available for free then you are the product.

It would be better to consult an investment advisor or a certified financial planner.

Best wishes;
Asked on - Apr 24, 2025 | Answered on Apr 24, 2025
Thankyou millind sir for your valuable suggestion...and yes you are correct sir but I have already consulted to two persons one is a fund manager in IIFL and another is financial planner in motilal Oswal...wanted to be more clear on SWP concept.....as I want to invest a big amount from my hard earning for my future
Ans: Hello;

What is your current age?

Please confirm.

Thanks
Asked on - Apr 24, 2025 | Answered on Apr 25, 2025
My age Is 46 sir....i have started my business carer since I was 14 years as I lost my father too early.......so I am planning to retire a bit early roughly at d age 55 ....so I needed the SWP details sir....thankyou ...
Ans: Hello;

If you need 1 L per month post tax income from SWP you would need a minimum corpus of around 3.5 Cr.

SWP basically stands for systematic withdrawal plan.

Obviously since it's your retirement corpus so absolutely no point in putting it in pure equity funds considering the high risks involved.

Therefore retirement corpus may be invested in conservative hybrid debt funds which have low allocation to equity.

The returns from these type of funds generally range between 7-9%.

The rate of withdrawal i.e. SWP rate therefore ideally may be between 3-4% and not more.

The fund should last you for your retired life providing steady inflation adjusted income as well as not depleting in value below your corpus amount which is a risk if market yields negative or flat returns.

The fund may be giving modest returns but selection criteria should focus on low risk fund portfolio by equity investment majorly in diversified large caps and debt investment majorly in sovereign, PSU, AAA rated bonds.

Monthly income from immediate annuity, bank FDs, rental from residential or commercial property, schemes such as POMIS, SCSS(after 60) etc may be utilised in tandem for generating income in retirement.

Best wishes;
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |8547 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 18, 2024

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Sir thanks please can you suggest me few names of mutual funds for SWP with good historical performance and good returns, As i don't have any experience. I shall be highly grateful to you. Regards
Ans: Certainly! When considering mutual funds for Systematic Withdrawal Plans (SWP), it's important to look for funds that have a consistent track record of good performance over the long term. Here are a few general guidelines and factors to consider:

Historical Performance: Look for funds that have consistently outperformed their benchmark and peers over a 3 to 5-year period. However, past performance is not indicative of future results.
Expense Ratio: Lower expense ratios can enhance your returns over time. It's advisable to choose funds with a lower expense ratio.
Fund Manager: An experienced and skilled fund manager can make a difference. Check the tenure and track record of the fund manager.
Fund Size: A larger fund size usually indicates investor confidence. However, very large funds might find it challenging to generate high returns due to liquidity constraints.
Asset Allocation: Make sure the fund's asset allocation aligns with your risk tolerance and investment goals.
Risk Profile: Evaluate the risk associated with the fund by looking at metrics like Standard Deviation, Beta, and Sharpe Ratio. Make sure it matches your risk appetite.
Consistency: Consistency in performance is key. Avoid funds with erratic performance even if they have had a few good years.
It's essential to understand that recommending specific mutual fund schemes without knowing your complete financial background, investment goals, risk tolerance, and time horizon can be risky. Each investor's needs and circumstances are unique, so what works well for one person may not be suitable for another.

Therefore, before making any investment decisions, it's highly recommended to consult with a certified financial advisor or investment professional who can provide personalized advice tailored to your individual needs and goals. They can help you choose the right mutual funds for your SWP based on a thorough understanding of your financial situation and objectives.

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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