In this video, we will discuss how you can use systematic withdrawal plan or SWP from mutual funds for regular retirement income
Edited highlights
0:04 In this video, we will discuss how you can use systematic withdrawal plan or SWP from mutual funds for regular retirement income
0:15 Pensions are provided by alternatives such as life insurance companies
0:22 Also, other options such as mutual retirement plans and other retirement products such as Senior Citizens Savings Scheme
0:33 How you can use systematic withdrawal plan or SWP in a mutual fund scheme to get regular retirement income
1:08 In a systematic withdrawal plan or SWP, your investment in mutual fund scheme is regularly being sold to create a regular income flow for you
1:24 While you can do an SWP in an equity fund or a debt fund but since this regular income needs to be a stable one, SWP in a debt fund scheme is recommended
1:38 This means that debt fund units will be sold to create regular income
1:52 This means that the money to create regular income through SWP needs to be put in a debt fund
2:09 A little more than 3 years before you need the money, you invest the money in a debt fund
2:14 The SWP kicks in when you need the money
2:17 As a result, units more than 3 years old are getting sold and regular retirement income or pension is being created
2:51 Any debt fund unit which is more than 3 years old get inflation indexation benefits for its long term capital gains and it gets taxed at 20%
3:07 Had the units been less than three years, short term capital gains tax would have been imposed and the gains got added to your income
3:14 They would have been taxed according to your relevant tax rate
3:33 Regular income from SWP can supplement regular retirement income from sources such as Senior Citizens Savings Scheme
4:09 SWP becomes a good tax efficient supplement for regular retirement income
