Whether you are doing a government job or a private job, everyone worries about a secure future. That’s why many people invest in mutual funds, the stock market, and different types of schemes to build a good fund for retirement.
But what if we tell you that you can build a fund of crores just with your PF money? Yes, it is possible. Let us explain the full calculation to you.
A Fund of More Than ₹2 Crore from EPF
EPF (Employee Provident Fund) is an investment that is automatically deducted from the salary of every working person. Over time, this small deduction becomes a big fund. To explain it simply—if your basic salary is ₹30,000 and you contribute 12% to EPF, you can build a fund of ₹2 crore 17 lakh 24 thousand 737 by the time you retire.
How This Amount is Calculated
This calculation is based on the idea that your current age is 25 and you will work till the age of 60. An 8.25% annual interest rate has been used for this (which may change), and your salary is assumed to grow by 5% every year. The employer’s share of 3.67% is also included in this.
According to an external EPF calculator, over 35 years, you will contribute ₹54 lakh 6 thousand 168. On this amount, you will earn ₹1 crore 63 lakh 18 thousand 569 as interest. So by retirement, your total fund will be more than ₹2 crore 17 lakh.
Big Returns from Small Monthly Savings
This example shows that even if your salary is not very high, regular savings in EPF without any withdrawal can give you a big amount later. EPF grows fast due to compounding, which means your money earns more money every year.
Do Not Ignore EPF
In today’s time, with rising prices and an uncertain future, EPF is a very safe and reliable investment. For private job holders, it can help them become financially free after retirement.
One important thing to remember is—do not withdraw your EPF money in between. If you change jobs, transfer your EPF account instead of starting a new one. Also, keep checking your EPF contributions and interest every year using the EPFO website or app.