EPF: Projected retirement corpus for basic salaries of Rs 15,000, Rs 25,000 and Rs 35,000
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 examines the potential retirement corpus one can accumulate with basic salaries of Rs 15,000, Rs 25,000, and Rs 35,000 through the Employees' Provident Fund (EPF) scheme. The Employees' Provident Fund Organization (EPFO) offers an annual compound interest rate of 8.25% on contributions. Both the employee and employer contribute up to 12% of the basic salary and dearness allowance (DA). The article provides detailed calculations, assuming a 25-year contribution period beginning at age 25, with a 5% annual salary increase.
Interest Rate
8.25% annual compound interest by EPFO.
Employer Contribution
Matches employee's contribution.
3.67% to EPF, 8.33% to EPS.
Salary and DA
Up to 12% of basic salary and DA.
Assumptions
Starting salary: Rs 15,000, Rs 25,000 and Rs 35,000.
Contribution starts at age 25, retirement at 60.
5% annual salary increase.
For a Basic Salary of Rs 15,000
The total EPF contribution over 25 years will be Rs 2703243. The interest earned will be Rs 81,59,652 resulting in a maturity amount of Rs 1,08,62,895
For a Basic Salary of Rs 25,000
The total EPF contribution over 25 years will be Rs 45,05,360. The interest earned will be Rs 1,35,99,128 resulting in a maturity amount of Rs 1,81,04,488.
For a Basic Salary of Rs 35,000
Over 25 years, the total EPF contribution will amount to Rs 67,07,473. The interest earned will be Rs 1,90,38,937 bringing the maturity amount to Rs 2,53,46,410.