EPF Retirement Fund Calculation: What should be your monthly contribution to get Rs 2 cr, Rs 3 cr, and Rs 4 cr corpus
EPF Maturity Calculator: Employees' Provident Fund (EPF) is a retirement scheme where the invested amount up to Rs 1.50 lakh in a financial year, the interest earned, and the maturity amount are tax-free. The EPF subscriber can contribute to their EPF account up to the age of 60 years.
EPF Interest Calculator: Investing in our working days and enjoying its benefits post retirement can be the aim of many of us. There are many retirement-centric schemes, where, if we start contributing early in life and invest monthly, even a small contribution can help us achieve a retirement corpus that can take care of our expenses post retirement. Employees' Provident Fund (EPF) is one such scheme, where private sector employees can contribute every month and get compound interest on it. If they make this investment for a long time, they can build a significant corpus. In this write-up, know more about the EPF scheme and what should be the estimated monthly contribution for a 25-year-old to gather a Rs 2 crore, Rs 3 crore, or Rs 4 crore corpus.
Photos: Unsplash/Pixabay
How EPF works
Private sector employees with a minimum basic salary of Rs 15,000 can start their EPF account. A monthly amount is deducted from their salary and goes to their EPF account. The good part is that the employer also contributes an equal amount.
EPF interest rate
The current interest in the scheme is 8.25 per cent.
What are minimum and maximum EPF contributions
The minimum monthly contribution in EPF is Rs 1,800, and the maximum is 12 per cent of the basic salary and dearness allowance (DA) of an EPF account holder.
How is employer's EPF contribution distributed?
Of the 12 per cent contribution from the employer, 3.67 per cent goes to the EPF account, while the rest, 8.33 per cent, goes to the Employees' Pension Scheme (EPS), which helps an employee get a monthly salary.
What are EPF tax benefits?
An employee gets tax benefits on deposits up to Rs 1.50 lakh in a financial year under Section 80C of the Income Tax Act, 1961. The interest earned and the maturity amount are also tax-free. This brings it under the exempt-exempt-exempt (EEE) category.
When can one withdraw EPF corpus?
On the completion of 10 years of service, 2 months after being jobless, or at 58 years of age, one can withdraw their EPF corpus.
EPF calculations
For our EPF calculations, we will take the example of a person who is starting their EPF contribution at the age of 25 years, and doing it till 60, for a span of 35 years.
EPF: Monthly contribution for Rs 2 crore corpus
The minimum estimated monthly contribution to achieve a Rs 2 crore corpus will be Rs 8,451.
EPF: Monthly contribution for Rs 2 crore corpus
The estimated contribution in 35 years will be Rs 35,49,420, and the estimated retirement corpus will be Rs 2,00,01,764.49.
EPF: Monthly contribution for Rs 3 crore corpus
The minimum estimated monthly contribution to achieve a Rs 3 crore corpus will be Rs 12,680.
EPF: Monthly contribution for Rs 3 crore corpus
The estimated contribution in 35 years will be Rs 53,25,600, and the estimated retirement corpus will be Rs 3,00,10,930.51.
EPF: Monthly contribution for Rs 4 crore corpus
The minimum estimated monthly contribution to achieve a Rs 4 crore corpus will be Rs 16,901.
EPF: Monthly contribution for Rs 4 crore corpus
The estimated contribution in 35 years will be Rs 70,98,420, and the estimated corpus will be Rs 4,00,01,162.18.