EPF Interest Calculator: How much retirement corpus one can build with monthly EPF contributions of Rs 3,500, Rs 7,000, and Rs 10,500
EPF Retirement Corpus Calculator: Employees' Provident Fund (EPF) is a slow and steady process to generate retirement corpus. While one gets tax benefits on deposits, the interest earned and the retirement corpus are also tax-free.
EPF Retirement Planning: Retirement planning is important for everyone. Individuals who are in jobs need to save and invest every month. They can start investing with a small amount, and as their income jumps, they can also increase their investment amount. Step by step, brick by brick, they can create a corpus that can help them fulfil their retirement-related requirements. If they stay in their investments for a longer period, they get more compounding on their return compared to someone who quits investing early. S, the mantra to create a higher corpus is to start investing early.
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How EPF can help build retirement corpus
EPF is a retirement scheme for private sector employees, where they can contribute monthly.
How EPF works
In EPF, both the employee and employer contribute to the employee's retirement corpus. The employee, or EPF subscriber, gets fixed compound interest on the contributions, and the corpus grows with time.
How EPF works
Employees' Provident Fund Organisation (EPFO) offers 7.25 per cent interest rate to its subscribers. The labour ministry reviews this interest rate every third month.
How much employer contributes
The employer can contribute a minimum of Rs 1,800, while the maximum contribution is 12 per cent of the basic salary and dearness allowance (DA). So, for the minimum EPF contribution, the minimum basic salary should be Rs 15,000.
What if someone wants to contribute more
They can do it under Voluntary Provident Fund (VPF), where the contribution beyond 12 per cent will go to VPF.
How much will employer contribute?
The employer needs to match the amount. Of its maximum 12 per cent contribution, 3.67 per cent goes to the employee's EPF account and 8.33 per cent to their Employees' Pension Scheme (EPS). The employee gets the contribution made to EPS in the form of a monthly pension post retirement.
EPF calculation
For our calculation, we will take Rs 3,500, Rs 7,000, and Rs 10,500 as the monthly contribution. The investment period will be 35 years. So if someone starts contribution at 25 years of age, we are assuming they will contribute till 60, and the estimated retirement corpus will be the amount they will have at that stage.
EPF retirement corpus on Rs 3,500 monthly for 35 years
The total contribution in 35 years will be Rs 14,70,000.
The estimated corpus generated will be Rs 82,83,774.19.
EPF retirement corpus on Rs 7,000 monthly for 35 years
The contribution in 35 years will be Rs 29,40,000.
The estimated EPF retirement corpus during that period will be Rs 1,65,67,548.39.
EPF retirement corpus on Rs 10,500 monthly for 35 years
The total contribution in 35 years will be Rs 44,10,000.
The estimated corpus generated with that monthly investment will be Rs 2,48,51,322.58.