EPF Monthly Investment Calculator: What should be your monthly contribution to get Rs 1 crore, Rs 2 crore, and Rs 3 crore retirement corpus in Employees Provident Fund
EPF Retirement Planning: Financial freedom in every stage of life is important. Be it while anyone is working or at retirement. Employees' Provident Fund (EPF) is one such scheme, where private sector employees can invest while they are working and withdraw money at retirement age.
EPF Retirement Corpus Calculator: Having financial freedom post retirement is equally important as while doing a job. That freedom can come when a person has a corpus large enough to meet post-retirement expenses. There are many schemes where, after investing consistently over the years, people can build a sizeable corpus.
Employees' Provident Fund (EPF) is one such scheme, where private sector employees can make contributions every month to build a retirement corpus. The employer also contributes to the employee's EPF fund. In this write-up, know how EPF works and what should be the monthly investment to build a Rs 1 crore, Rs 2 crore, and Rs 3 crore corpus for a 25-year old.
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(Disclaimer: Our calculations are projections and not investment advice. Do your own due diligence or consult an advisor for retirement planning.)
EPF
In EPF, both the employee and the employer contribute monthly to the EPF account of the employee. Any private sector employee with a basic monthly salary of Rs 15,000 can start an EPF account. The minimum EPF contribution in such a case is Rs 1,800.
What is interest rate in EPF?
The current interest rate in EPF is 8.25 per cent. The finance ministry can change it if it wants.
What's the maximum EPF contribution?
There is no fixed amount, but it is 12 per cent of the basic monthly salary and dearness allowance (DA) of the employee. The employee, after talking to their HR, can fix it as per their convenience.
What happens to employer's contribution?
The employer's 12 per cent contribution is distributed into 2 parts. The 3.67 per cent of it goes to the EPF account of an employee, but the major portion (8.67 per cent) goes to the employee's Employees Pension Scheme (EPS) account. Through the EPS contribution, the employee gets the monthly pension.
When can one withdraw EPF amount?
One can withdraw the EPF fund at the time of retirement age of 58 years; for being unemployed for 2 months; or for family members in case of death before the specified period; a medical emergency; home renovation or construction; repayment of a home loan, etc.
EPF calculation
For our calculation, we will show 35 years as the investment horizon for a 25-year-old.
Monthly contribution to reach Rs 1 crore retirement corpus goal
In this case, the estimated monthly contribution for 35 years should be Rs 4,250. The estimated retirement corpus will be Rs 1,00,58,868.66.
Monthly contribution to reach Rs 1 crore retirement corpus goal
The investment during this period will be Rs 17,85,000.
Monthly contribution to reach Rs 2 crore retirement corpus goal
The estimated monthly contribution for 35 years should be Rs 8,451. The estimated retirement corpus will be Rs 2,00,01,764.49.
Monthly contribution to reach Rs 2 crore retirement corpus goal
The investment during this period will be Rs 35,49,420.
Monthly contribution to reach Rs 3 crore retirement corpus goal
The estimated monthly contribution for 35 years should be 12,680. The estimated retirement corpus will be Rs 3,00,10,930.51.
Monthly contribution to reach Rs 3 crore retirement corpus goal
The investment during this period will be Rs 53,25,600.