By News18
PF Maturity Calculator: Planning for retirement at the early stage is very important. It helps you to build a substantial corpus to secure your life after 60s without worrying the financial challenge. The government also supports some schemes to offer a net of security to aging population. The Employees鈥 Provident Fund (EPF) is one such retirement scheme managed by the Employees鈥 Provident Fund Organisation (EPFO).
The scheme is designed for salaried employees in the organized sector to help them in building a retirement corpus through regular contributions from both employer and the employee side.
It has two parts: Employees鈥 Provident Fund Scheme (EPF), a savings scheme where contributions accumulate with interest for retirement, and Employees鈥 Pension Scheme (EPS), which provides pension benefits post-retirement or to dependents in case of the member鈥檚 death.
Both employee and the employer contribute 12% of the employee鈥檚 basic salary plus dearness allowance (DA) to the EPF account. Out of 12% contribution from the employer, 8.33% goes to the EPS and 3.67% goes to the EPF.
The Central Board of Trustees sets the interest rate for a given fiscal year. Interest is credited annually and is tax-free. The government keeps the interest rate at 8.25% for FY2024-25.
Subscribers do have maturing-related questions like, 鈥渉ow much will they get from the EPF after 10, 15, 20 years of services?鈥
PF Calculator On Salary
Let鈥檚 calculate the rough estimates.
We鈥檝e taken some assumptions beforehand:
Basic Salary + DA: Rs 25,000/month
Employee Contribution: 12% of salary
Employer Contribution: 12% of salary (8.33% to pension, rest to EPF)
EPF Interest Rate: 8.25% per annum (as per latest FY 2024-25)
Moreover, the scenario is considered that there is no withdrawals during the period.
On the given Rs 25,000 per month salary, the contribution of employee at 12% rate would be Rs 3,000/month and employer鈥檚 contribution at 3.67% would be Rs 917.5/month, taking the total contribution per month Rs 3,917.5. That means, the annual contribution accounts to Rs 47,010 every year.
We keep several things constant in this scenario: the individual鈥檚 income, interest rate, just EPF part, and other changes related to income. These factors will influence the outcome.
Based on the above estimates, EPF maturity value will be approx. Rs 7.45 lakh in 10 years, approx. Rs 14.08 lakh in 15 years and Rs 23.09 lakh in 20 years.
Disclaimer: The returns mentioned above are rough estimates based on assumed annual returns and historical trends. Actual results may vary depending on market conditions and fund performance.