Method, example and interpretation · Revised 16 October 2026
Choose a return measure that matches your cash flows
Investment calculators answer different questions. SIP and Step-Up SIP project future contributions, SWP models withdrawals, CAGR compares a single starting and ending value, and XIRR accounts for dated cash flows. Choosing the correct tool matters as much as the selected return assumption.
Step-Up SIP uses a consistent monthly model
Your first monthly contribution increases by the chosen percentage at each investment anniversary. The existing corpus and all new contributions use the same nominal monthly rate. Contributions grow separately from investment gains, so a larger final corpus does not automatically mean better investment performance.
Withdrawals stop when money runs out
SWP credits the assumed monthly growth, then pays the lesser of the requested withdrawal and available balance. It reports achievable withdrawals and the month of depletion rather than inventing payments after the fund is empty. A constant average return still cannot capture sequence risk: poor early returns can shorten the life of a real withdrawal portfolio.
CAGR, absolute return and XIRR
Absolute return measures total percentage gain without time. CAGR annualises a single lump sum. XIRR solves for an annual rate using each cash-flow date and a 365-day year. Enter investments as negative amounts and withdrawals or the final portfolio value as positive amounts. Complex flows with repeated sign changes may have multiple mathematical solutions.
Worked example
A ₹10,000 monthly SIP rising 10% each year for 15 years, assuming 12% nominal annual return.
Projected Step-Up corpus: ₹86,83,849.
The annual increase requires a larger contribution budget every year. Check the total invested before choosing this plan.
Questions about this tool
Should the final valuation be entered in XIRR?
Yes. If the investment is still held, enter its current value as a positive cash flow on the valuation date. Otherwise the rate describes incomplete cash flows.
Can SWP guarantee a monthly income?
No. Here the withdrawal is a scenario, not an annuity or a bank guarantee.