SIP Calculator: See How a ₹5 Lakh Lump Sum Can Generate ₹88,100 Monthly Income for 30 Yrs

Planning for steady, long-term income from your investments? While SIPs help you accumulate wealth over time, combining a lump sum investment with a Systematic Withdrawal Plan (SWP) can provide dependable monthly cash flow especially during retirement or for long-term income needs.

Here’s a breakdown of how a ₹5 lakh lump sum invested today can potentially provide over ₹88,100 per month for the next 30 years.

Phase 1: One-Time Investment

To build a solid income stream through an SWP, you first need to grow your corpus. In this example, we assume a ₹5 lakh one-time investment in an equity mutual fund held over 30 years at an expected return of 12% CAGR.

Here’s what the Lump Sum Calculator estimates:

• One-time Investment: ₹5,00,000
• Duration: 30 years
• Expected Return: 12% CAGR
• Estimated Returns: ₹1,44,79,961
• Final Corpus: ₹1,49,79,961

Income Tax on Final Corpus: What You Might Owe

Since the investment is held for more than 12 months, Long-Term Capital Gains (LTCG) tax applies. Here’s a basic breakdown:

• Initial Investment: ₹5,00,000
• Final Corpus: ₹1,49,79,926
• Capital Gains: ₹1,44,79,926

LTCG Tax Calculation:

• LTCG Exemption: ₹1,25,000
• Taxable Gains: ₹1,43,54,926
• LTCG Tax Rate (10%): ₹14,35,493 (approx.)
• Post-Tax Corpus: ₹1,35,44,433

Phase 2: Monthly Income with SWP (30 Years)

Once your lump sum has matured, the next phase is to withdraw income using an SWP. Assuming your post-tax corpus of approx. ₹1.35 crore is reinvested in a conservative debt fund with 7% annual returns, here’s the SWP Calculator projection:

• SWP Investment Amount: ₹1,35,44,433
• Estimated Annual Return: 7%
• Projected Monthly Withdrawal: ₹88,100
• Corpus Remaining After 30 Years: ₹74,904

Read More: SWP Calculator: See How a ₹3.99 Lakh Lump Sum Can Generate ₹67,000 Monthly Income for 30 Yrs.

Conclusion

This example demonstrates that a ₹5 lakh one-time investment, when allowed to compound over a long horizon and paired with a Systematic Withdrawal Plan, can deliver consistent monthly income for decades.

Actual outcomes will vary based on market performance, taxation, and fund selection. Still, this approach shows how structured planning using SIP and SWP calculators can help build long-term income.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.