EPF Calculations: Here's how you can accumulate over Rs 2 crore retirement corpus with basic salary of Rs 25,000 per month
EPF Calculations: EPFO assigns each member a 12-digit number known as the UAN (universal account number). Even if an employee changes employers, his or her UAN remains the same.
EPF (employee provident fund) is a government-backed retirement savings scheme through which employees can save part of their salaries. In EPF, employees and employers invest 12 per cent of the employee's basic wages, dearness allowance (DA), and retaining allowance. EPF helps employees save for their retirement. The interest rate on EPF is decided by the government and compounded annually. The current EPF interest rate is 8.25 per cent.
Images: Pixabay, Pexels, Freepik
Who manages EPF in India?
EPF is managed by the Employees' Provident Fund Organisation (EPFO).
What is EPFO?
EPFO is a social security agency that manages provident funds, pension schemes, and insurance schemes for employees in India.
What is UAN?
EPFO assigns each member a 12-digit number known as the UAN (universal account number). Even if an employee changes employers, his or her UAN remains the same.
Can you withdraw EPF before retirement?
You can withdraw your EPF partially for marriage and education purpose, in case of unemployment, medical emergencies, and home renovation etc.
Retirement
You can withdraw the entire PF amount once retire at the age of 58.
Resignation
You can also withdraw your provident fund after two months of resigning from your job.
Documents required for PF withdrawal
UAN (Universal Account Number)
Identity and address proof
Bank account details of the EPF subscriber
Cancelled cheque with IFSC code and account number
How to accumulate over Rs 2 crore retirement corpus with a Rs 25,000 basic salary?
If your monthly salary is Rs 25,000 per month and you start investing at 23 years of age then you can accumulate a fund of Rs 2,18,43,497 at retirement.
Calculations of accumulating over Rs 2 crore fund
On a yearly hike of five per cent in salary, you can invest Rs 50,63,538 starting at 23 till retirement. On this, you will get an interest of Rs 1,67,79,959 at an 8.25 per cent annual rate. The total maturity amount will be Rs 2,18,43,497.
Total years of investment
As per the above calculation, you will have to invest for around 37 years to make a corpus of Rs 2 crore.
This is not investment advice. Do your own due diligence or consult an expert for financial planning.