EPF Retirement Corpus: How much maximum fund can one generate with starting basic salary of Rs 25,000, Rs 30,000, or Rs 35,000?
EPF Interest Calculator: Employees' Provident Fund is a popular retirement investment option among private sector employees. They can contribute monthly and increase their investment amount as their salary increases. Or, they can also choose to contribute a fixed minimum amount. The scheme provides compound interest and immense tax benefits.
Retirement Planning: Employees' Provident Fund (EPF) is the primary retirement investment scheme for most Indians working in the private sector. They can contribute monthly during their service period and create a retirement corpus that can help them achieve their financial goal. EPF subscribers can start contributing with a minimum amount and gradually increase their contribution as their monthly income increases. The scheme provides compound interest, and the maturity amount is tax-free. Know more about the scheme and what's the maximum retirement corpus one can generate with the starting basic salary of Rs 25,000, Rs 30,000, or Rs 35,000?
Photos: Unsplash/Pixabay
(Disclaimer: This is not investment advice. Do your due diligence or consult an expert for retirement planning.)
EPF: Minimum and maximum investment
The minimum monthly investment in EPF be Rs 1,800, while the maximum monthly contribution is the 12 per cent of the basic salary and dearness allowance (DA) of an employee.
EPF interest rate
The scheme offers 8.25 per cent compound interest rate to its subscribers. The labour ministry reviews the EPF interest rate every quarter.
EPF contribution from employer
The employer matches the employee's contribution. From the employer's contribution, 3.67 per cent amount goes to the employee's EPF account, while 8.33 per cent goes to their Employees' Pension Scheme (EPS). The employee gets the EPS amount in the form of the monthly pension post retirement.
When can one withdraw EPF corpus
On the completion of 10 years of service or at 58 years of age. However, under specific conditions, such as unemployment for 2 months or marriage, the amount can be withdrawn before that.
EPF tax benefits
EPF is one of the few exempt-exempt-exempt category schemes where contributions up to Rs 1.50 lakh in a financial year provide tax benefits under Section 80C of the Income Tax Act. The interest earned and the maturity amount are also tax-free.
EPF retirement corpus calculation
We will calculate the retirement corpus on basic salaries of Rs 25,000, Rs 30,000, or Rs 35,000. The duration of the EPF contribution will be 35 years (from 25 years of age to 30). The contribution will be 12 per cent of the basic salary and DA. We are also expecting a salary increase of 5 per cent.
EPF retirement corpus starting with basic salary of Rs 25,000
The total investment in 35 years will be Rs 45,05,360.
EPF retirement corpus starting with basic salary of Rs 25,000
The estimated interest will be Rs 1,35,99,128, and the estimated retirement corpus will be Rs 45,05,360.
EPF retirement corpus starting with basic salary of Rs 30,000
The invested amount in 35 years will be Rs 54,06,168.
EPF retirement corpus starting with basic salary of Rs 30,000
The estimated interest will be Rs 1,63,18,569, and the estimated retirement corpus will be Rs 2,17,24,737.
EPF retirement corpus starting with basic salary of Rs 35,000
The investment in 35 years will be Rs 63,07,473.
EPF retirement corpus starting with basic salary of Rs 35,000
The estimated interest earned will be Rs 1,90,38,937, and the estimated retirement corpus will be Rs 2,53,46,410.