PF Money: If a working person’s salary is around Rs 50,000 per month, then he can create a good fund till retirement through EPF. This means that small savings each month can eventually lead to a substantial corpus, resulting in a substantial sum of money over time. Let’s explore how a person earning Rs 50,000 can become a millionaire using their PF funds.
How does EPF money grow?
EPF is considered a reliable savings method for employed individuals. Each month, both the employee and the employer contribute money. Long-term investment and interest earned provide financial stability to individuals in the long run. Its unique advantage is that it creates a substantial fund for employed individuals by the time they retire.
EPF calculation on salary of Rs 50,000
If a person’s salary is Rs 50,000 and the basic pay is Rs 25,000, then the employee deposits around Rs 3,000 every month in EPF. The company contributes approximately Rs 917, which means a total of approximately Rs 3,917 is deposited into your EPF account each month. This way, you accumulate approximately Rs 47,000 over a year, earning an annual interest rate of 8.25%, allowing this amount to grow steadily over time.
How much fund can be created till retirement?
If a person starts a job at the age of 25 and continues this investment until the age of 60, they can accumulate a corpus of approximately Rs 29,392,257 by the time they retire. However, their salary should continue to increase by 9 percent every year (according to the SBI Securities EPF Calculator).
During this period, your total investment is approximately Rs 1,01,39,268, while the remaining money grows with interest and time. The simple thing is that by saving small amounts every month and keeping the money deposited for a long time, a big retirement fund can be gradually created.
