EPFO Updates: The Employees’ Provident Fund Organization allows subscribers to invest some part of their salary in EPF, then they are able to accumulate a significant amount at the time of retirement. This makes it easier as opposed to investing in different places to ensure social security.
According to financial experts, if your basic salary is 20 thousand from the age of 25, 24% (12% Employee + 12% Employer) EPF is deducted, hence an investment of Rs. 4800 will be made every month. If you keep investing continuously for another 25 years, you can get a corpus of up to 2.79 crores on retirement.
How the Retirement Fund is Created
- An interest rate of 8.5 percent is given while investing in EPF. If we assume a salary hike of 7% then investment started at the age of 25 will make you a millionaire by the time you are old.
- If the age to start investing is 25 years and the basic salary is 20 thousand, then you can get Rs 2.79 crore at the time of retirement.
- If the salary is Rs 28,051 at the age of 30, then 2.30 will be available at the time of retirement.
- At the age of 35, the salary is Rs 39,343, at the time of retirement, you will get Rs 1.85 crore.
- If you start investing from the age of 40, then you will get Rs 1.42 on the basic salary of Rs 55,181.
- At the age of 45, if the basic salary is Rs 77,394, you will get Rs 1.03 crore.
- At the age of 50, if the basic salary is Rs 1,08,549, you will get 66.44 lakhs at the time of retirement.
Things to Remember
- Withdrawing money from the provident fund is not recommended unless it is for emergencies, as that reduced your savings. For example, if you withdraw 1 lakh from the PF account at the age of 30, then at the age of 60, 11.55 lakh will be reduced from the fund.
- Apart from this, you should always stay prompt with transferring the old account if you change jobs. The older the PF account, the more benefits you can receive.
- In case of non-transfer, interest will accrue on the new account, but the interest on the old account will stop after 3 years. You can easily transfer your EPF account through UAN.
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