How to Earn 1,00,000 Monthly Income from a 2 Crore Lumpsum Using SWP: The Ultimate Passive Income Strategy

For investors with a significant one-time corpus – say ₹2 crore – looking to generate a stable monthly income without depleting their capital too quickly, a Systematic Withdrawal Plan (SWP) from mutual funds can be a smart and tax-efficient strategy.

In this guide, we’ll explore how you can earn ₹1,00,000 per month using SWP from a ₹2 crore investment. We’ll break down how long your money can last at a conservative 9% return, how much room you have with aggressive 12% returns, and what type of funds and risks you need to consider.

🧾 What is SWP (Systematic Withdrawal Plan)?

An SWP or Systematic Withdrawal Plan is a mutual fund facility that allows you to withdraw a fixed amount regularly, while the rest of your corpus remains invested and continues to earn returns.

It helps investors generate passive monthly income from a lump-sum investment – perfect for retirees, early retirees, or individuals with large liquidity events like property sales or inheritance.

📊 How to Get ₹1,00,000 Monthly Income from ₹2 Crore Using SWP

Let’s take the following assumptions:

• Lumpsum Investment: ₹2 crore

• SWP Withdrawal: ₹1,00,000/month

• Annual Return: 9% (post-expense, conservative)

• Time Frame: Until corpus depletes or grows, depending on return

Scenario 1: 9% Annual Return (Moderate-Risk Funds)

• Monthly return @ 9% annual = 0.75%, so ₹2 crore earns approx. ₹1.5 lakh/month.

• You withdraw ₹1,00,000, and ₹50,000 continues to compound.

Result: Your capital may last over 25–26 years, depending on market consistency.

This is ideal for retirement income, where safety and capital longevity matter more than high growth.

📈 Scenario 2: 12% Return – Higher Risk, Higher Reward

Suppose you invest in a more aggressive equity-heavy mutual fund or balanced fund that gives 12% annualized return.

• Monthly return = ~1% → ₹2 crore earns ₹2 lakh/month

• Withdrawal = ₹1,00,000/month

• Surplus = ₹1,00,000/month is retained and reinvested

Result: You not only get your desired income, but your corpus continues to grow, potentially making your wealth permanent and inflation-beating.

For example, in 20 years, your ₹2 crore may grow to over ₹9–10 crore, even after consistent monthly withdrawals, if average return remains at 12%.

However, such returns come with market volatility, so you must be comfortable with occasional ups and downs in fund NAV.

🔮 Starting SWP at a Younger Age – The Power of Compounding

Imagine beginning this plan at age 30. With ₹2 crore and withdrawing ₹1,00,000/month from a fund returning 12% annually:

• You withdraw ₹1.2 lakh/year × 12 = ₹12 lakh/year

• Your investment continues to grow faster than the outflow

Over 30 years, your corpus could multiply 4–5x, even after withdrawals. This makes SWP an effective part of early retirement (FIRE) strategies.

🧺 Best Types of Mutual Funds for SWP

Choosing the right fund is essential to balance returns and risk. Recommended categories:

1. Balanced Advantage Funds (BAFs) – Great for risk-managed growth

2. Equity Savings Funds – Lower risk than equity, better than debt

3. Flexi Cap or Large Cap Funds – If your risk appetite allows

4. Multi-Asset Funds – Diversified exposure to equity, debt, gold

Avoid sectoral, small-cap, or thematic funds for core SWP unless your withdrawals are a small % of corpus.

💸 Tax Efficiency of SWP vs FD, Annuity & Rental Income

SWP is highly tax-efficient, especially when compared to other income sources:

• Equity Funds: LTCG over ₹1 lakh/year taxed at 10%

• Debt Funds (post-April 2023): Taxed as per slab if <35% equity

• Older Debt Funds: If held before April 2023 and for over 3 years, get 20% with indexation

🧠 Who Should Consider an Aggressive SWP?

An aggressive SWP strategy may suit:

• Young professionals with other income sources

• HNIs seeking tax-efficient passive cash flow

• FIRE aspirants aiming to live off investments

• Entrepreneurs or consultants balancing volatile incomes

It is not ideal for:

• Fully dependent retirees

• Very conservative investors

• Those uncomfortable with equity-linked NAV changes

✅ Benefits of SWP-Based Income Strategy

• Steady Income: Regular cash flow to cover expenses

• Tax Smart: Only pay on capital gains, not full amount

• Control: Modify, pause, or stop withdrawals anytime

• Capital Growth: Corpus may grow if withdrawals < returns

• Estate Benefit: Unused funds go to nominees

🆚 SWP vs FD vs Annuity – Quick Comparison

🛠️ How to Start an SWP with ₹2 Crore

1. Choose Fund based on risk profile

2. Invest ₹2 crore as lump sum (growth option)

3. Start SWP – Set ₹1,00,000/month as withdrawal amount

4. Track performance every 6–12 months

5. Rebalance or change strategy if needed

6. Consult an advisor for tax planning and reallocation

🚫 Mistakes to Avoid

• Overestimating safe withdrawal rate

• Picking highly volatile funds blindly

• Ignoring taxation or exit load rules

• Not adjusting for inflation over time

• Assuming returns will always be consistent

📘 Conclusion

With proper planning, ₹2 crore can yield ₹1,00,000/month using a Systematic Withdrawal Plan, either for 25+ years (at 9%) or indefinitely (at 12%). SWP gives you flexibility, tax efficiency, and long-term control – unlike traditional products like FDs or annuities.

If you have a sizable corpus and want to convert it into reliable income, SWP can be your best bet – just make sure your fund choice aligns with your goals and risk profile.

❓ Frequently Asked Questions (FAQs)

🔹 Is ₹1,00,000/month income sustainable from ₹2 crore?
Yes. At 9% return, you can sustain this income for over 25 years. With 12%, the corpus could grow while generating income.

🔹 Will I lose capital over time?
Only if withdrawal > return. At 9%, the corpus slowly reduces. At 12%, it can grow despite SWP.

🔹 What’s better: SWP or FD?
SWP is more flexible, tax-efficient, and potentially higher-return—but it carries market risk.

🔹 Can I increase or stop SWP later?
Yes. It’s fully customizable. You can modify, pause, or stop it anytime.

🔹 Are there any hidden charges?
Watch for exit loads and taxation rules in the scheme documents.

⚠️ Disclaimer:
Investing in mutual funds is subject to market risks. Consult your advisor before making any investment. The above information is for educational purposes only and does not constitute financial advice. Assumptions such as a 9% or 12% return are indicative and may not reflect future performance. Mutual fund returns are not guaranteed and may vary depending on market conditions. Always review scheme-related documents carefully before investing.