Regular Income Solutions: SWP via Balanced Advantage Funds

Secure Regular Income with SWP via Balanced Advantage Funds

As retired investors seek out for periodic withdrawals, Systematic Withdrawal Plans (SWP) have become an attractive choice. SWP allows individuals to withdraw a fixed amount from their investment at regular intervals. The key advantage of SWP is that it provides a regular cash flow while the remaining funds continue to stay invested, potentially benefiting from capital appreciation.

To effectively manage periodic withdrawals, hybrid strategies such as Balanced Advantage Funds, Multi Asset Funds, Equity Savings Funds, and Conservative Hybrid Funds are good options to be considered. These strategies tactfully manage asset allocation based on market trends, adjusting exposure to equities and debt according to changing market conditions, while aligning with your risk appetite to provide steady income and long-term growth potential.

Key Features of SWP:

1. Periodic Income:

SWP ensures a steady, predictable income, ideal for meeting regular expenses.

2. Flexibility:

Investors can choose the amount and frequency of withdrawals according to their needs.

3. Tax Efficiency:

Withdrawals are subject to capital gains tax, which could be more favourable than regular income tax, depending on the investment’s holding period.

4. Investment Growth:

The withdrawals and corpus growth happens in tandem offering an opportunity to combat inflation over time.

Illustration of Systematic Withdrawal Plan (SWP) Via BAF

Had an individual taken the SWP route via BAF, he would have received total periodic withdrawal of Rs 14.6 Lakhs over a 5-Year tenure with the initial invested corpus growth to Rs 63.1 Lakhs