EPF: From monthly contribution of Rs 5,000 to monthly pension of Rs 1 lakh; Know about retirement planning?

Employee Provident Fund (EPF) is a popular retirement saving plan for salaried employees. If your target is to earn a monthly income of Rs 1 lakh after retirement, then this is possible through EPF investment. Let us know how you can achieve your goal. But how much can an EPF investment of Rs 5,000 or Rs 1 lakh/month grow over time?

EPF is managed by the Employees' Provident Fund Organization and offers a fixed interest rate. Which is reviewed annually. As of now, the interest rate offered in this scheme is 8.25%/year. In this, the returns increase rapidly over time. Assuming a work period of 30 years, here is how the EPF corpus will grow at 8.25% interest per annum.

1. Contribution of Rs 5,000

Monthly deposit: Rs 5,000

Tenure: 30 years

Interest rate: 8.25%

Corpus at retirement: Around Rs 77.04 lakh

2. Contribution of Rs 1 lakh

Monthly deposit: Rs 1 lakh

Tenure: 30 years

Interest rate: 8.25%

Corpus at retirement: Around Rs 15.41 crore

Factors affecting EPF

Contribution period: The longer you contribute, the higher the compounding.

Interest rate fluctuations: EPF rates change annually, affecting long-term returns.

Employer contribution: Employers also contribute to EPF, which increases the total accumulation.

Withdrawals and transfers: Premature withdrawal reduces the final corpus, while consistent contributions increase it.

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