Youngsters are increasingly looking to give their lives freedoms that their parents only dreamed of and that means they want to get rid of the shackles of employment as soon as possible in their lives. That means, in effect, an early retirement to focus on doing things that they love, even if it is to follow a hobby. But how is it possible to retire at 50 as a crorepati? Well, retirement can happen any time and employee chooses, but the idea is to retire with a fat nest egg. And notably, this is very much possible with the high EPF interest rate now on offer. Yes, the Employees’ Provident Fund Organisation (EPFO) holds the power of turning the employees, whose funds it manages, into a crorepati, even if they retire early.
Needless to say, the EPF is one of the safest and highest earning money-making schemes for employees. All they have to do is to make sure they do not withdraw any money from it, nor should they break their contributions. The reason is that the higher the sum and the longer the investment, the better the sums of money employees will get back. This will give compounding of interest adequate time to do its magic.
EPF: How to retire early with Rs 1 crore
And now, on to how to retire early and still become a crorepati via the EPF alone. Let us assume that a focused young person starts his EPF journey at the age of 21. He wants to retire at just 50, 8 years before reaching the retirement age of 58. His salary (basic) is Rs 25000 and on this, he expects to get an increment (yearly) of 7%. The contribution to EPF is 12%, while the employer’s contribution to EPF is 3.67%. And finally, one of the most important factors in the equation, the EPF interest rate, which is at a high 8.25%.
EPF calculator:
Age: 21
Retirement: 50
Basic salary: Rs 25000
Increase in salary (yearly): 7%
Employee’s Contribution to EPF: 12%
Employer’s contribution to EPF: 3.67%
EPF Interest rate: 8.25%
When the EPF calculator does the equation, it throws up a big number and reveals, that the employee can very well retire at just 50 years of age and that too as more than a crorepati.
Courtesy the high EPF interest rate and the focused approach of the employee, the sum he will get on retirement is Rs 1,53,40,479.
Considering that the employee did not have to manage his money at all and the sum kept increasing every year as if by magic, this becomes a positive thing in every way.
Note: The sums mentioned here are estimations and the actual amounts would be provided in the EPF passbook.
The high EPF interest rate of 8.25% can get you over Rs 1 crore on a starting basic pay of Rs 25000 and allow you to retire at 50 as a crorepati Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
