EPF: Projected retirement corpus for basic salaries of Rs 20,000, Rs 30,000 and Rs 40,000
The EPFO provides an annual compound interest of 8.25% on contributions. Both employee and employer contribute a maximum of 12% of the basic salary and dearness allowance (DA). Read more.
This article explores the potential retirement corpus one can accumulate with basic salaries of Rs 20,000, Rs 30,000, and Rs 40,000 through the Employees' Provident Fund (EPF) scheme. The EPFO provides an annual compound interest of 8.25% on contributions. Both employee and employer contribute a maximum of 12% of the basic salary and dearness allowance (DA). The article includes detailed calculations, assuming a 25-year contribution period starting at age 25, with a 5% annual salary increase.
Interest Rate
8.25% annual compound interest by EPFO.
Salary and DA
Up to 12% of basic salary and DA.
Employer Contribution
Matches employee's contribution.
3.67% to EPF, 8.33% to EPS.
Assumptions
Starting salary: Rs 20,000, Rs 30,000, or Rs 40,000.
Contribution starts at age 25, retirement at 60.
5% annual salary increase.
For a Basic Salary of Rs 20,000:
Over 25 years, the total EPF contribution will amount to Rs 36,04,312. The interest earned will be Rs 1,08,79,549, bringing the maturity amount to Rs 1,44,83,861.
For a Basic Salary of Rs 30,000:
The total EPF contribution over 25 years will be Rs 54,06,168. The interest earned will be Rs 1,63,18,569, resulting in a maturity amount of Rs 2,17,24,737.
For a Basic Salary of Rs 40,000:
The EPF contribution over 25 years will be Rs 72,08,492. With interest earned at Rs 2,17,58,595, the maturity amount will be Rs 2,89,67,087.