EPFO Pension: To make life after retirement pleasant and relaxed, it is necessary to do investment planning from today itself. No matter how low your salary is, you can also create a strong retirement fund through EPF… Let’s understand the complete calculation in the news below-
EPFO Pension: To make life after retirement pleasant and relaxed, it is necessary to do investment planning from today itself. Through the right investment, we can collect enough funds for retirement, which can avoid financial crisis. This systematic plan ensures financial security and independence in the future.
EPF (Employees’ Provident Fund) is a great option for you. It is not only safe, but also gives you good returns.
No matter how low your salary is, you can also create a strong retirement fund through EPF. You can create a huge retirement fund for yourself even with a basic salary of Rs 10,000.
Guaranteed return on EPFO investment-
Although there are many investment and retirement schemes available in the market, no scheme can compete with the facilities offered on the Provident Fund of EPFO (Employees’ Provident Fund Organisation). Because EPFO’s interest rates are not only better than other savings schemes, but EPFO also gives guaranteed returns year after year, so that you can raise a good fund for retirement.
Although there are many market-linked schemes that can give higher returns than EPF, but there are many uncertainties associated with them and they cannot guarantee that you will raise a large fund till your retirement.
How does EPFO scheme work for employees?
Under the EPFO scheme, the company deducts 12% every month from the basic salary of each employee, and the company also contributes the same amount. Out of this, 8.33% goes to the employee’s pension scheme, while 3.67% is deposited in the Provident Fund. This scheme is for the future financial security of the employees.
Who can avail EPF?
To avail the benefit of EPF, you have to fulfill certain eligibility criteria. Formal sector organizations with 20 or more employees are required to register with the EPFO. However, organizations with less than 20 employees can voluntarily register with the EPFO.
All salaried employees are eligible for EPF. Specifically, employees earning less than Rs 15,000 per month are required to register for the EPF scheme, while those earning more than Rs 15,000 can opt for the EPF scheme on a voluntary basis.
When can you claim EPF?
An employee can use the accumulated EPF funds on his retirement or leaving the service, if he meets the prescribed criteria. If the employee dies, his dependents get the benefit of EPF. This fund is important for the future financial security of the employee and support of the family.
Let us know how a retirement fund of Rs 2 crore can be created from a basic salary of Rs 10,000-
The basic salary of the employee is Rs 10,000 and he will get a hike of 10% every year. In 37 years, his salary will increase to around Rs 96,000. The contribution to EPF is 12%, so if his contribution is calculated, then the total contribution from the increasing salary every year can be around Rs 2.71 crore.
As per EPFO rules, the employee contributes 12% of his basic salary, which is Rs 1,200 every month. Similarly, the company also contributes Rs 1,200. Out of the company’s contribution, Rs 367 is added to the employee’s EPF fund. In this way, the total monthly contribution to the EPF fund will be Rs 1,567, and this amount will increase by 10% every year. Apart from this, out of the company’s contribution, Rs 833 goes to the employee’s Pension Scheme (EPS). – Age of employee: 23 years
- Years of service: 37 years (till retirement at the age of 60)
- Total monthly contribution: Rs 1,200 (employee) + Rs 367 (from the company) = Rs 1,567
- Annual salary increment: 10%
- According to this, in 37 years, the total deposit amount is Rs 68,46,018.
- The total interest received on this amount is Rs 1,30,08,857.
- Thus, after 37 years, the total corpus or maturity amount will be Rs 1,98,54,875.
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