By doing nothing extra, you can simply retire with millions of rupees in your account! This article is especially for private employees who might be anxious about their retirement plans.
However, there is a precondition: You must be employed by a company that is a member of the Employees Provident Fund (EPF) Scheme. For establishments covered by the EPF plan, making a monthly contribution equal to 12% of the employee's basic salary plus the Dearness Allowance as well as matching that contribution to the same account is required.
8.33% of the employer's contribution goes to the Employees’ Pension Scheme (EPS), and the remaining portion goes to the employee's PF account. Employees are somewhat relieved of the responsibility of saving for retirement thanks to the required contribution rule.
The interest rate on EPF contributions is typically higher than 8%, to start. The EPF interest rate at the moment is 8.5 percent. The actual retirement corpus will therefore be higher than Rs. 1.15 crore.
Second, a person's basic pay typically rises as they gain work experience or advance in their careers. This implies that the EPF account contribution likewise grows over time. Even if you started with Rs 5000/month, there is a good chance that your retirement corpus will be substantially more than Rs 1.15 crore.
According to calculations, a monthly investment of Rs 8,000 for 30 years at an interest rate of 8% will net you almost Rs 1.19 crore. At an interest rate of 8%, a monthly commitment of Rs 10,000 for 30 years will net you almost Rs 1.5 crore. Similarly, at 8% interest, a monthly payment of Rs. 15,000 will result in around Rs. 2.24 crore upon retirement.
What can EPF account holders do?
EPF account holders should try to avoid closing their accounts or taking partial withdrawals from the fund before retirement in order to maximize their EPF contributions. Additionally, you should monitor the monthly payments made by your employer and take action if they are not crediting your account.
Although having an EPF account is fantastic, employees should also look into other investment possibilities to increase their wealth while they are still in their working years.
