EPF Corpus Calculator: Are you 25-year-old with Rs 20,000 monthly basic salary? Here's how much fund you can generate till retirement?
EPF Interest Calculation: A private sector employee with at least Rs 15,000 monthly basic salary and dearness allowance (DA) can start contributing to EPF. The current interest rate in the scheme is 8.25 per cent that is subject to review every 3 months. EPF provides tax benefits to its subscribers.
EPF Retirement Corpus Calculation, EPFO: Employees' Provident Fund (EPF) is a retirement-centric scheme for private sector employees with the monthly basic salary and dearness allowance (DA) of at least Rs 15,000. There is no age restriction to join EPF. However, one can't become a member at the age of 58 years and over. Not only the employee, but their employer also contributes an equal amount to the employee's EPF account. Investment over the years gets compound interest and helps an EPF account holder create a large corpus in the long run.
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(Disclaimer: Our calculations are projections. Official calculations may vary.)
EPF: Who can contribute?
A private sector employee with at least Rs 15,000 monthly basic pay and DA. They can start contributing as soon as they join their job. The contribution is on a monthly basis.
EPF: Minimum and maximum contribution
The minimum monthly contribution is Rs 1,800, while the maximum is 12 per cent of the basic pay and DA of an employee.
Non-market-linked retirement option
The scheme keeps the EPF contributor's money comparatively safer than many market-linked investment options. The scheme provides compound interest and guaranteed return, helping contributors to ward off many of their retirement corpus-related worries.
EPF: Maximum age limit to contribute to EPF
While there is no minimum age to contribute to EPF, the maximum age is 60 years.
EPF: Withdrawal rules
At the retirement age of 58 years, one can withdraw their entire corpus. The withdrawal is also possible in case of unemployment. On 1 month of unemployment, they can withdraw up to 75 per cent corpus, while on 2 months of employment, they can withdraw the rest, 25 per cent.
Partial withdrawal is allowed for medical purposes, marriage, education, land purchase, house renovation, home loan repayment, etc.
Partial withdrawal before retirement
When the employee reaches 54 years of age, they can withdraw up to 90 per cent corpus.
EPS pension
Out of the employer's 12 per cent contribution, 8.33 per cent goes to the employee's Employees' Pension Scheme (EPS). The employee gets this amount back with interest in the form of a monthly pension post retirement.
EPF calculation conditions for 25-year-old employee
We will take the example of a 25-year-old employee who has a basic salary of Rs 20,000. We assume the employee will contribute till 60 and they will have a 5 per cent annual increase to their salary. Thus, the total year of EPF contribution for the EPF subscriber will be 35 years. The monthly contribution will be 12 per cent of the basic pay and DA.
Investment in 35 years
The total amount invested in 35 years will be Rs 36,04,312.
Retirement corpus at 60 years of age
The estimated interest in 35 years will be Rs 1,08,79,549, while the estimated retirement corpus will be Rs 1,44,83,861.