New Delhi: EPFO is a social security scheme for salaried individuals that offers them a corpus to fall back on besides a pension after retirement. EPFO also offers options for premature withdrawal under certain conditions, apart from a fixed annual rate of return that i decided every year by the EPFO’s governing Council. Check our PF calculator to find out how your can turn a crorepati in 35 years by continued investment in EPF.
How PF can make you crorepati with Rs 20,000 basic pay
To find out how a Rs 20,000 per month salary can make you a crorepati, we will make the following assumptions:
You are aged 25 years
You expect 5 per cent annual pay increase in your career
You will contribute 12 per cent of your basic pay per month into EPF
You will retire by age 60
Your employer contributes 3.67 per cent to your PF account
Now, with these assumptions, your initial investment of Rs 2,400 per month or Rs 28,800 per annum, will grow at 5 per cent per year and accumulate into a corpus worth Rs 36.04 lakh. At the current rate of interest of 8.25 per cent, you will have earned an interest of over Rs 1.08 crore. This will take your total corpus to Rs 1.44 crore.
How much PF return on 30,000 basic pay in 35 years?
Key assumptions for calculation:
Basic pay: Rs 30,000
Monthly 12 per cent contribution of Rs 3,600
Starting age of 25 years for investment
2 per cent annual increment per year for 35 years
Retirement age of 60 years
Here’s what you will earn as per our calculations:
The contributor will have accumulated a principal of Rs 29.33 lakh.
The interest accrued on this principal would be Rs 1.20 crore
The individual will have accumulated a total corpus of Rs 1.49 crore in 35 years, i.e., on turning 60 years old.
Disclaimer: Consult a financial advisor for clarity on investments. This article is meant for information purposes only.
EPF calculator: Use our calculator to understand how compounding works. Plan your career and investments accordingly to create a sizeable corpus for your retirement. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
