Investing 17 Lakhs for a Monthly SWP of Rs 15,000: The Best Scheme for You

Are you looking to invest 17 lakhs (1,700,000 Indian Rupees) with the aim of withdrawing Rs 15,000 per month through SystematicWithdrawal Plan (SWP)? Given that you are withdrawing Rs 180,000 annually, which amounts to 10% of your capital, a straightforward calculation indicates that it might not be sustainable over a long term.

Factors Affecting Success

When considering investment strategies, it is crucial to analyze several factors. First, your capital needs to grow at a sufficient rate to compensate for the withdrawals, and second, your risk appetite should be factored in to mitigate potential losses.

Evaluating Your Withdrawal Rate

If you insist on withdrawing Rs 15,000 per month, you are essentially withdrawing 10% of your initial investment annually. Historically, withdrawing more than 4% of your capital annually can deplete your funds over time, especially if the market experiences downturns. However, financial advisors generally recommend a withdrawal rate that hovers around 4% to ensure long-term sustainability of your investment pool.

Boost Your Capital or Adjust Withdrawal Rate?

Two key options emerge from this situation:

Increasing Your Capital: If possible, let your funds sit for an additional 6 years to allow for more substantial growth. This can help sustain a higher withdrawal rate over a longer period. Reducing Withdrawal Rate: Alternatively, you can reduce your withdrawal to Rs 8,500 per month, which amounts to 5% of your capital annually. This approach is more conservative and can help ensure the longevity of your investment.

Seek Professional Advice for Optimal Returns

Consulting with a professional financial advisor is essential to navigate the complexities of investment strategies. A good advisor can provide personalized advice and strategies based on your unique financial goals.

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Disclaimer

The insights provided here are based on my knowledge and market research, albeit with the understanding that the final decision rests with you. I am not liable for any losses that may occur.

It is advisable to conduct your own research and consult with a financial advisor before making any investment decisions. The information provided is for guidance purposes only and should not be construed as financial advice.