How does SWP work?

I want to understand how exactly the SWP option works. I mean, if I put up a lumpsum amount today and from next month onwards I want the income, can I do that? Secondly, if I can start withdrawing money from the second month itself, then will it not affect my base capital? - Krutika Kathal Khadekar Investing is not just about entering the market in a staggered manner. Having an exit plan is also important so you can redeem investments methodologically. Just like how a systematic investment plan (SIP) protects you from market volatility by investing periodically, a systematic withdrawal plan (SWP) allows you to redeem in a phased manner and protects you from redeeming all your investments at a market low. It averages the price at which you exit the market. Compared to a 'dividend' plan of a mutual fund, an SWP is more suitable for retirees, who are typically looking for a fi

This article was originally published on August 31, 2022.