You instruct the AMC: "Withdraw ₹X on the 5th of every month." Units are redeemed automatically; the rest stays invested and keeps growing.
The 4% rule of thumb
A safe starting withdrawal is about 4–5% of corpus per year, rising with inflation. ₹1 crore → ₹35,000–40,000/month initially.
The biggest SWP risk is sequence risk: keep 2–3 years of withdrawals in debt funds.
Mutual fund investments are subject to market risks. This article is for education, not personalised advice.