EPF Calculator: How much retirement corpus can you build with Rs 5,000, Rs 8,000, Rs 12,000 monthly contributions for 30 years?
EPF Retirement Corpus: Employees' Provident Fund creates a tax-free retirement corpus, where one can contribute monthly and get compound interest on their investment. The investor can create a substantial amount on their investments in the long run.
EPF Retirement Corpus Calculator: Retirement planning is a long-term plan. Individuals keen to build a retirement corpus can invest in market-linked and non-market-linked investment plans. Employees' Provident Fund (EPF) is a non-market-linked plan for private sector employees, where they contribute monthly to build a retirement corpus. They can contribute a fixed amount, increase or decrease their monthly investment. The current interest rate in EPF is 8.25 per cent. EPF is a popular investment option since it gives guaranteed returns and creates a tax-free retirement corpus.
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(This is not investment advice. Do your own due diligence or consult an expert for retirement planning.)
Who can contribute in EPF?
Any private sector employee with at least a Rs 15,000 monthly salary and dearness allowance (DA) can start contributing to their EPF account. The monthly amount is deducted from their monthly salary.
Minimum and maximum monthly EPF contributions
The minimum monthly EPF contribution should be Rs 1,800, while the maximum can be 12 per cent of the basic salary and DA.
Employer's role in EPF contribution
Not just the employee, but the employer also contributes an equal amount. However, not all its contribution goes to the employee's EPF account.
Where else does it go?
Of the total 12 per cent contribution, the employer's 3.67 per cent goes to the employee's EPF account. The rest, 8.33 per cent, goes to the employee's Employees' Pension Scheme (EPS).
What happens to EPS amount?
The employee also gets interest on the EPS amount. At retirement, or under specific conditions, the employee can draw a monthly pension from the amount.
What are EPF tax benefits?
EPF provides 2 types of tax benefits.
Deposits up to Rs 1.50 lakh in a financial year provide tax benefits under Section 80C of the Income Tax Act, 1961.
The interest earned on the monthly contribution and the retirement corpus are also tax-free.
How EPF helps in portfolio
Since EPF has a fixed interest rate, it forms a strong debt option for an EPF account holder for their portfolio diversification.
EPF retirement corpus calculation
For our calculations, we will take Rs 5,000, Rs 8,000, and Rs 12,000 as monthly EPF amounts. The investment duration will be 30 years. We will calculate as per the current interest rate.
EPF Corpus Calculator: Retirement corpus with Rs 5,000 monthly contribution for 30 years
The total investment in 30 years will be Rs 18,00,000, and the estimated corpus will be Rs 77,03,796.03.
EPF Corpus Calculator: Retirement corpus with Rs 8,000 monthly contribution for 30 years
The EPF account holder will contribute Rs 28,80,000, and the estimated EPF corpus will be Rs 1,23,26,073.65.
EPF Corpus Calculator: Retirement corpus with Rs 12,000 monthly contribution for 30 years
At Rs 12,000 monthly EPF contribution, the total investment will be Rs 43,20,000, and the estimated corpus will be Rs 1,84,89,110.47.