EPF Calculator: Current age 24 and basic salary is Rs 18,000; know how you can accumulate over Rs 1.5 crore corpus at retirement
A provident fund (PF) is a savings scheme for employees that helps them make a retirement fund and offers financial stability. It is a statutory reward that employees receive when they leave their jobs or retire. In the EPF account, the employees can add funds and interest and can get them after their retirement. The partial withdrawal can also be done from the PF account in case you need it for medical bills, higher education, marriage, or house construction.
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Pension
A PF account holder is eligible to get a pension after 58 years.
Insurance
PF account holders are also insured for up to Rs 7 lakh under the EDLI scheme in case of death during service.
PF interest rates
The EPFO usually provides higher interest rates than offered by banks in savings accounts.
Who regulates provident funds?
The PFs are regulated by the Employees' Provident Fund Organisation (EPFO).
Is premature withdrawal available in PF?
Yes, an EPF account holder can make a partial withdrawal of the funds in case they need it for higher education, marriage, house construction, or medical bills.
Tax exemption
Contributions to a PF account are tax-exempt up to Rs 1.5 lakh under Section 80 (C) of the Indian Income Tax Act.
Current age 24 and basic salary is Rs 18,000; how to accumulate Rs 1.5 crore fund?
If your current age is 24, you can easily accumulate more than Rs 1.5 crore retirement fund through EPF contributions.
What you need to do?
If you invest 12 per cent every month from your basic salary for 36 years, then your maturity amount would be Rs 1,51,19,449 at retirement, as per calculations.
Interest and total investment in 36 years
Currently, EPFO is giving 8.25 per cent interest annually. In 36 years, your total investment will be Rs 36,31,230 and your total interest will be Rs 1,14,88,219.
Expected annual salary hike
In these calculations, the employee's annual salary hike is considered 5 per cent.