If you are employed and you have an account in the Employees Provident Fund Organizations then, this news is definitely for you. To secure the future, many of us invest in different places, so that we don’t face any difficulty in our old age.
But, if you don't want to invest independently, though, EPF can help you in this. Employees' Provident Fund Organization (EPFO) offers its account holders the option to invest a portion of their pay in EPF and get a large amount when they retire.
According to experts, if your basic pay is Rs 20,000 and EPF is deducted at a rate of 24% (12% Employee + 12% Employer) from the age of 25 years, you will be investing Rs 4800 every month. If you invest consistently for 25 years, you can retire with more than Rs 2 crores.
Let us explain you in simple terms.
Below we have mentioned, how retirement savings built & the key suggestions to keep in mind.
How Retirement Savings is Built?
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When you invest in EPF, you get an interest rate of 8.5%. If we assume a 7% salary increase, investing at the age of 25 will make you a billionaire till you retire. Let's look at the processes to see how much benefit will be offered and when will it begin.
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If you start investing at the age of 25 and earn a minimum salary of Rs 20,000, you would have more than Rs 2 crore when you retire.
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At the age of 30, if the basic salary is Rs 28,051, 2.30 crore will be accessible when you retire.
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If, the pay at the age of 35 is Rs 39,343, therefore when you retire, you will receive Rs 1.85 crore.
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On a basic salary of Rs 55,181, if you start investing at the age of 40, you will gain Rs 1.42 crore.
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The basic pay at 45 is Rs 77,394, thus you would receive Rs 1.03 crore.
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If the basic pay at 50 is Rs 1,08,549, thus you would receive Rs 66.44 lakhs when you retire.
Key Suggestions to Keep in Mind
Withdrawing money from your EPF account unless it's for a really necessary job or an emergency will reduce your retirement savings. If you remove Rs 1 lakh from your Provident Fund account at the age of 30, your retirement savings will be decreased by Rs 11.55 lakh at the age of 60.
Apart from that, you should get your old account transfer only, when you change jobs. You will receive more rewards if your PF account is older.
In case, if the account is not transferred, interest will accrue on the new account, but interest on the old account will cease after three years. Through UAN, you can quickly transfer your EPF account.
