Know Your EPF Monthly Contribution: What should be your EPF investment to generate funds worth Rs 50 lakh, Rs 1 crore, Rs 1.50 crore, and Rs 2 crore at retirement?
EPF Maturity Amount Calculator: Employees' Provident Fund (EPF) is a retirement scheme where private sector employees can make a monthly contribution to build a retirement corpus. Contributions up to Rs 1.50 lakh in a financial year provide tax benefits under Section 80C of the Income Tax Act, 1961.
EPF Retirement Amount Calculator: Retirement planning is necessary for youngsters, as once they are old, there is a likelihood that their sources of income may deplete. At such a time, money that they invest in their young age will help them build a retirement corpus or get a monthly pension in their old age. There are many retirement schemes for private as well as government sector employees. Employees' Provident Fund (EPF) is one of them.
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What is EPF?
EPF is a retirement scheme run by the Employees' Provident Fund Organisation (EPFO), where the employee and the employer make a monthly contribution to the employee's EPF retirement corpus. Employees get 8.25 per cent interest compounded yearly on the overall investment. They can withdraw this money on completion of 10 years of service or at 58 years of age. They can contribute to their EPF corpus till the age of 60.
Limit to EPF monthly contribution
The scheme is for those private sector employees earning at least Rs 15,000 monthly basic salary. The minimum contribution from the employee's side is Rs 1,800, and the maximum is 12 per cent of the basic salary and dearness allowance.
Limit to EPF monthly contribution
If one wants to contribute beyond that, they can do it under Voluntary Provident Fund (VPF). From the employee's contribution in EPF, 3.67 per cent goes to EPF, and 8.33 goes to Employees' Pension Scheme (EPS). EPF subscribers get tax benefits up to Rs 1.50 lakh in a financial year under Section 80C of the Income Tax Act, 1961. The interest earned and the maturity amount are also tax-free.
EPF Retirement Corpus Calculation
We are taking the example of a person who will start their EPF contribution at the age of 25 and will continue it for another 35 years (till 60 years of age). The monthly EPF contribution will remain the same throughout the service.
How to generate Rs 50 lakh EPF retirement corpus
To get an estimated EPF retirement corpus of over Rs 50 lakh, the estimated monthly EPF contribution should be Rs 2,115. That contribution can help one generate an estimated retirement corpus of Rs 50,05,766.41.
How to generate Rs 1 crore EPF retirement corpus
An estimated monthly contribution of Rs 4,230 can help one generate a corpus of over Rs 1 crore. With that EPF contribution, one may generate an estimated retirement corpus of Rs 1,00,11,532.81.
How to generate Rs 1.50 crore EPF retirement corpus
For an over Rs 1.50 crore EPF corpus, the estimated monthly contribution should be Rs 6,340. It will help one get an estimated retirement corpus of Rs 1,50,05,465.25.
How to generate Rs 2 crore EPF retirement corpus
The estimated monthly contribution to generate over Rs 2 crore retirement corpus should be Rs 8,455.
How to generate Rs 2 crore EPF retirement corpus
This monthly EPF contribution will help one generate an estimated retirement corpus of Rs 2,00,11,231.66.
Disclaimer
(Disclaimer: Calculations given here are projections. Actual calculations may vary.)