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EPF Calculations: How to create Rs 2,00,00,000 retirement fund if your basic salary is Rs 27,700? Check calculations
- Written by Bhawna Gupta
Published: Zee Business| Updated: Zee Business
EPF (Employee Provident Fund) is a famous retirement benefits scheme launched in 1952 in India. It is regulated by the Employees' Provident Fund Organisation (EPFO). In this, both employee and employer contribute 12 per cent of the employee's basic wages, dearness allowance (DA), and retaining allowance for long-term to earn interest, and it can be withdrawn upon retirement. Along with providing tax benefits, EPF provides higher interest rates than other savings schemes. The interest rate on EPF is decided by the government and compounded annually. The current EPF interest rate is 8.25 per cent.
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What is UAN?
1/8A UAN, or universal account number, is a 12-digit number that is given to all EPFO members. Every employee has a different UAN.
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Can you withdraw EPF before retirement?
2/8You can withdraw your EPF partially for marriage and education purposes, in case of unemployment, medical emergencies, and home renovation, etc.
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Retirement
3/8You can withdraw the entire PF amount once you retire at the age of 58.
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Resignation
4/8You can also withdraw your provident fund after two months of resigning from your current job.
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Documents required for PF withdrawal
5/8UAN (Universal Account Number) Identity and address proof Bank account details of the EPF subscriber Cancelled cheque with IFSC code and account number
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How to accumulate over Rs 2 crore retirement corpus with a Rs 27,700 basic salary?
6/8If your monthly basic salary is Rs 27,700 per month and you start investing at 25 years of age, then you can accumulate a fund of Rs 2,00,59,340 at retirement, calculations show.
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Calculations for accumulating Rs 2 crore fund
7/8On a yearly hike of five per cent in salary, you can invest Rs 49,91779 starting at 25 till retirement. On this, you will get an interest of Rs 1,50,67,561 at an 8.25 per cent annual rate. The total maturity amount will be Rs 2,18,43,497.
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Total years of investment
8/8As per the above calculation, you will have to invest for around 35 years to make a corpus of Rs 2 crore.
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