How much can you accumulate for retirement through EPF? Here's what you need to know

The potential retirement corpus one can accumulate through the Employees' Provident Fund (EPF) scheme varies depending on one's basic salary. This article breaks down the calculations for basic salaries of Rs 15,000, Rs 25,000, and Rs 35,000. The Employees' Provident Fund Organization (EPFO) currently offers an annual compound interest rate of 8.25% on contributions made to the fund.

EPF Contributions: How They Work

Both the employee and the employer contribute up to 12% of the basic salary and dearness allowance (DA) to the EPF. The employer's contribution is divided into 3.67% for the EPF and 8.33% for the Employees' Pension Scheme (EPS). These contributions, coupled with the interest accrued over time, can form a substantial retirement corpus.

Key Assumptions

• Starting Salary: Rs 15,000, Rs 25,000, and Rs 35,000
• Contribution Start Age: 25
• Retirement Age: 60
• Annual Salary Increase: 5%
• Interest Rate: 8.25% annual compound interest
• Retirement Corpus Projections

For a Basic Salary of Rs 15,000

• Total EPF Contribution Over 25 Years: Rs 27,03,243
• Interest Earned: Rs 81,59,652
• Maturity Amount: Rs 1,08,62,895

For a Basic Salary of Rs 25,000

• Total EPF Contribution Over 25 Years: Rs 27,03,243
• Interest Earned: Rs 81,59,652
• Maturity Amount: Rs 1,08,62,895

For a Basic Salary of Rs 35,000

• Total EPF Contribution Over 25 Years: Rs 67,07,473
• Interest Earned: Rs 1,90,38,937
• Maturity Amount: Rs 2,53,46,410

The EPF scheme offers a reliable way to build a significant retirement corpus over time, especially when contributions begin early and salaries increase steadily. With a basic salary of Rs 35,000, the total corpus could exceed Rs 2.5 crore, providing a substantial financial cushion for retirement.