Is it possible to withdraw from my SIP investments partially after a period of 10 years? What should be the withdrawal strategy for a goal with a horizon of 10 years?
- Shakul Gupta
One can easily withdraw from one's SIP investments any time. You need not necessarily have to wait for 10 years. Ideally, it is better to withdraw after 5-10 years, as it's a nice way to accumulate your savings in equity. But as specified earlier, you can take your money out any time from these funds.
All your investments that are over one-year-old will be liable for LTCG (long-term capital gains) at 10 per cent. Further, over one year, most funds do not even charge exit load. So, after one year, you can easily withdraw from your investments.
To answer your second question, there is nothing called as a one-stop withdrawal strategy that Value Research can suggest. A withdrawal strategy is dependent on your needs. You have accumulated say Rs 50 lakhs in various funds through SIP and you retire. From there on, say you want to derive a monthly income of Rs 40,000. For the same, you should accordingly create a systematic withdrawal plan (SWP). So, your withdrawal strategy should be a function of your periodic need for income.
The need for income may be different for different people. While you may want to generate regular income, others who get pension/rental income may want some amount for other goals like travelling abroad, maintaining his/her house, etc. Therefore, any withdrawal strategy is dependent on individual needs instead of anyone's opinion.