Read on Twitter
EPF and VPF
By default, 12% of Basic pay is contributed towards PF as employee contribution.
Employer also contributes 12% of basic pay to your PF account.
By default, 12% of Basic pay is contributed towards PF as employee contribution.
Employer also contributes 12% of basic pay to your PF account.
Employer contribution(12% of basic pay) will be split into two as below:
8.33% to EPS (Employee pension scheme managed by EPFO) however there is an upper limit.
3.67% to PF account
8.33% to EPS (Employee pension scheme managed by EPFO) however there is an upper limit.
3.67% to PF account
EPS?
Eligibility for getting pension amount:
* Should be a member of EPFO
* Should have completed 10 years of service
* Should have reached the age of 58
Pension amount calculation:
Pensionable salary * Pensionable service / 70
Eligibility for getting pension amount:
* Should be a member of EPFO
* Should have completed 10 years of service
* Should have reached the age of 58
Pension amount calculation:
Pensionable salary * Pensionable service / 70
Pensionable salary is avg. monthly salary in last 12 months or Rs. 15,000 whichever is lesser.
Simplest investment for salaried people is to contribute more in Provident Fund which is called Voluntary Provident Fund.
Simplest investment for salaried people is to contribute more in Provident Fund which is called Voluntary Provident Fund.
Yes, You can contribute voluntarily upto 100% of your basic pay to PF (already 12% contributed by default).
Interest rate for PF is declared every financial year and for FY 2019-2020 it was 8.5% and expected to reduce for current financial year.
Interest rate for PF is declared every financial year and for FY 2019-2020 it was 8.5% and expected to reduce for current financial year.
Remember amount invested in PF is for very long term until you retire or resign your job.
Illustration with 10% contribution as VPF:
To make calculation simpler, Let’s consider basic pay as 15,000 INR.
Illustration with 10% contribution as VPF:
To make calculation simpler, Let’s consider basic pay as 15,000 INR.
Total no. of years in service : 30
With 12% Employee + 3.67 % employer contribution : Approx. 39 Lakh is accumulated.
With additional 10% as VPF : Approx. 64 Lakh is accumulated
10% additional is just 1,500 per month in this case.
With 12% Employee + 3.67 % employer contribution : Approx. 39 Lakh is accumulated.
With additional 10% as VPF : Approx. 64 Lakh is accumulated
10% additional is just 1,500 per month in this case.
A simple change can make enormous difference.
Let’s make simple investments to make huge difference in retirement life.
Let’s make simple investments to make huge difference in retirement life.
