How to Withdraw a Regular Income from Your Mutual Fund

Mutual funds are not just a great tool for wealth creation—they can also be a reliable source of regular income, especially for retirement, education, or other long-term goals. As an AMFI and NISM certified expert with over 8 years of experience in the stock market, I, Dr. Bushra Praveen, am here to guide you on how to strategically plan for regular withdrawals without exhausting your corpus too soon.

In this article, I’ll explain a few key scenarios on how you can structure your withdrawals and give you an idea of how much corpus will remain after several years.

Example 1: Retirement Plan - ?50 Lakh Investment

You have ?50 lakh invested in a mutual fund and plan to withdraw ?25,000 per month during your retirement. Let's assume the fund earns an annual return of 10%, and your withdrawal rate is ?3 lakh per year (?25,000 per month).

How much corpus remains after 20 years?

After 20 years of withdrawing ?25,000 monthly:

• Total withdrawal: ?60 lakh (?3 lakh per year × 20 years)
• Remaining corpus: ?1.12 crore.

Despite regular withdrawals, your investment would still grow due to the power of compounding!

Example 2: Child Education Plan - ?25 Lakh Lump Sum Investment

You invest ?25 lakh as a lump sum for your child's education, and you plan to withdraw ?12,500 per month while earning a 10% return annually. You withdraw at a 6% annual rate.

How much corpus remains after 10 years?

After 10 years of withdrawing ?12,500 per month:

• Total withdrawal: ?15 lakh (?1.5 lakh per year × 10 years)
• Remaining corpus: ?39.6 lakh.

Even with the regular withdrawals, your investment would still have grown significantly.

Example 3: Monthly Income Plan - ?10 Lakh Lump Sum Investment

You invest ?10 lakh as a lump sum and wish to withdraw ?5,000 per month while earning a 10% return annually. The annual withdrawal rate is 6%.

How much corpus remains after 10 years?

After 10 years of withdrawing ?5,000 monthly:

• Total withdrawal: ?6 lakh (?60,000 per year × 10 years)
• Remaining corpus: ?15.8 lakh.

Once again, your corpus grows, allowing for continued withdrawals without depleting your principal.

Ready to Plan Your Mutual Fund Withdrawals?

Each of these scenarios demonstrates how you can enjoy regular income from your mutual fund without exhausting your initial investment. Whether you're planning for retirement, education, or monthly income, I can help you tailor your investment plan based on your unique financial goals.

If you’re ready to start your SIP or have any queries, feel free to message me directly, or start your SIP using the links below:

• Start SIP

I’m here to assist you every step of the way. Let’s make your financial dreams a reality!

Dr. Bushra Praveen Ph.D., IIT Indore | Postdoc at IIT Hyderabad | AMFI & NISM Certified Financial Advisor Helping you achieve your financial goals with expertise in SIPs and mutual funds