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EPFO’s Secret to Stress-Free Retirement: How You Could Save ₹2 Crore!

Siddhi Jain | November 18, 2024 3:15 PM CST

The Employees' Provident Fund Organization (EPFO) has proven to be a reliable retirement savings plan, helping employees build a significant retirement corpus. By consistently contributing to the EPF scheme and refraining from early withdrawals, employees can accumulate a large fund to secure their future.

EPFO: Your Key to a Stress-Free Retirement

The EPF scheme, managed by the EPFO throughout an employee's career, deducts a portion of your salary for savings. This contribution earns compound interest over time, resulting in substantial growth. By retirement, this fund can comfortably support your post-retirement life.

Accumulating ₹2 Crore with EPFO

To lead a secure retirement, a fund of ₹2–2.5 crore is often required. The EPF account makes this possible through disciplined investments during your working years. The combined contributions from employees and employers, along with accrued interest, significantly grow your savings over time.

How EPF Contributions Work

The employee contributes 12% of their basic salary and dearness allowance to the EPF account, while the employer matches this contribution. Of the employer's contribution, 8.33% is allocated to the Employees' Pension Scheme (EPS), while 3.67% goes to EPF.

For example:

Basic Salary + Dearness Allowance: ₹25,000
Employee Contribution (12%): ₹3,000
Employer Contribution (EPF - 3.67%): ₹917.50
Employer Contribution (EPS - 8.33%): ₹2,082.50
Total EPF Contribution per Month: ₹3,000 + ₹917.50 = ₹3,917.50

Interest is calculated annually (currently at 8.25%) and added to the EPF account balance at the end of each financial year.

Checking Your EPF Balance Online

You can monitor your EPF account and balance using the online portal or the UMANG app.

Visit the EPFO Member Passbook portal.
Log in using your UAN (Universal Account Number) and password.
If using the portal for the first time, activate your UAN with the OTP sent to your registered mobile number.
Select the desired account to view the balance and transaction history.

Alternatively, use the UMANG app for quick access to your EPF balance and other related details.

By leveraging the EPFO scheme and staying consistent with contributions, employees can build a significant retirement fund and enjoy a stress-free post-retirement life.