Many people have this question in their minds: How will life go on after retirement? How will financial planning be done? It becomes very difficult to work at the age of 60. At such a time, there is usually no one to help. Asking for money at this age also feels uncomfortable.

But don’t worry — the Government of India has taken an important step for senior citizens. Under this new initiative, senior citizens can receive a pension of around ₹10,000 per month. This amount will be provided through the Systematic Withdrawal Plan (SWP) of mutual funds. With proper financial planning, you can also build a large retirement fund using this method. In today’s article, let us understand some important details about this scheme and how it can secure your life after retirement.

What is SWP?

SWP means Systematic Withdrawal Plan. It is a facility in mutual funds that allows investors to withdraw a fixed amount regularly. This is very helpful for those who want a steady monthly income after retirement or for other needs.

Example:

  1. You invested ₹10 lakh in a mutual fund.
  2. You want to withdraw ₹10,000 every month using SWP.
  3. The fund house (AMC) will send ₹10,000 to your bank account every month.
  4. The remaining amount stays invested and keeps earning returns.

How to Build a Retirement Fund?

If a person starts investing ₹5,000 every month in a SIP (Systematic Investment Plan) from the age of 35, and the average annual return is 12%, then:

After 25 years (at age 60), the person can have around ₹85 lakh as a retirement fund.

How to Start SWP?

To begin your SWP, follow these steps:

  • Visit the website of the mutual fund company or talk to your financial advisor.
  • Fill out the SWP form or do it online.
  • Choose the fund from which you want to withdraw.
  • Decide how much to withdraw every month.
  • Select how often you want the money — monthly, quarterly, etc.
  • Give your bank details where the money will be credited.