NPS vs EPF: Projected retirement corpuses on Rs 12,500 per month investment? Get calculations
NPS, EPF: National Pension System (NPS) and Employees' Provident Fund (EPF) are both retirement planning schemes. While EPF provides a fixed compound interest rate of 8.25 per cent, NPS is a market-linked retirement investment option where one can select equity exposure as per their risk appetite and age. In both NPS and EPF, one gets a lump sum amount and a monthly pension post retirement. Know more about both schemes and get the projected retirement corpus in each scheme on a Rs 12,500 monthly contribution for 30 years.
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What is NPS?
NPS is a retirement scheme, where one can contribute once in a financial year or monthly from the age of 18 years to 75 years. It has Tier I and Tier II accounts.
What is NPS?
The NPS accountholder gets a lump sum amount of up to 60 per cent of their corpus at the retirement age of 60 years. The rest, 40 per cent, is used to purchase annuity for a monthly pension.
What is EPF?
In EPF, the employee and the employer contribute monthly to the employee's EPF account.
What is EPF?
The employer's contribution also goes to the employee's pension account (EPS). An employee can contribute up to a maximum 12 per cent of their basic salary and dearness allowance (DA) to their EPF account.
What is EPF?
Deposits up to Rs 1.50 lakh in a financial year in EPF provides tax benefits under Section 80C of the Income Tax Act.
EPF vs NPS: Projected retirement corpus on Rs 12,500/month contribution for 30 years
In NPS, if you get a 10 per cent return on your Rs 12,500/month contribution for 30 years, your retirement corpus will be Rs 2,84,91,567.
EPF vs NPS: Projected retirement corpus on Rs 12,500/month contribution for 30 years
If you get a 12 per cent return, it will be Rs 4,41,23,923.
EPF vs NPS: Projected retirement corpus on Rs 12,500/month contribution for 30 years
Since EPF provides 8.25 per cent interest, a Rs 12,500 monthly contribution for 30 years will give you Rs 1,92,59,490.07 as the retirement corpus.