Every employee out there working his fingers to the bone is doing so to earn as much money as possible to ensure a comfortable life for himself and his family. However, that is not possible only on the strength of the monthly salary. Investment is a must if he wants to save money for his retirement, children’s education, marriage, purchase of a home or for that matter, getting a steady income after retirement or after a sudden job loss. And for that, there is his EPF. All of this is all possible through the Employees’ Provident Fund Organisation (EPFO). Every employee of a company who is a part of EPF can dream of getting huge sums of money through the EPF and the high interest rate it promises.
An employee must ensure that he leaves his EPF account untouched till retirement. If he withdraws money, or loses job, the impact would be extremely bad and will impact his life in his advanced years quite badly. So, let us find out what a basic salary of Rs 30,000, Rs 35000 and Rs 40,000 will give an employee at the time of his retirement, which is 58 years.
All of these figures will be visible to the employee through the a simple EPF balance check. Keeping the EPF passbook updated is also a must.
A few assumptions about EPF investment here are a must. Let us assume that a young man of 20 years joins the EPF at the age of 20. His basic salary is Rs 30000. He will be retiring after 38 years at the age of 58. The EPF interest rate is 8.25% and the contribution is 12% of the basic salary. The employer’s contribution to the EPF for this employee will be 3.67%. Throughout his life, the employee gets an average increment in his job of 6%.
With this EPF interest rate and the magic of compounding at work this man will have earned Rs 40,911,920.
Age: 20
Retirement: 58
Salary 30000
EPF interest rate 8.25%
Contribution: 12%
Employer’s contribution: 3.67%
Increment: 6%
What EPF provides: Rs 40,911,920
Now, imagine the same for this next person who too starts his EPF journey at 20. The only difference for him is that his basic salary is Rs 35000. And what does he earn from the EPF after reaching retirement age? Rs 48,338,708.
Age: 20
Retirement: 58
Salary: 35000
EPF interest rate: 8.25%
Contribution: 12%
Employer’s contribution: 3.67%
Increment: 6%
What EPF provides: Rs 48,338,708
Let us see how much this next person will earn. He too starts his EPF investment journey at the age of 20 and works till retirement at 58. How does he earn from EPF? The Employees’ Provident Fund gives him Rs 55,765,472 when he superannuates.
Age: 20
Retirement: 58
Salary: 40000
EPF interest rate: 8.25%
Contribution: 12%
Employer’s contribution: 3.67%
Increment: 6%
What EPF provides: Rs 55,765,472.
Note: The sums mentioned here are estimations and the actual amounts will be mentioned in the EPF passbook.
How much money will an employee make from his EPF investment? Know how much a Rs 30k pay, Rs 35k salary and Rs 40k salary will give. EPF interest rate is 8.25%. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
