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The Employees’ Provident Fund Organisation (EPFO) provides a pension after retirement, but many are unaware of how to increase their pension amount. Here are some strategies to maximize your pension under EPFO.

Delaying Pension for Higher Returns

EPFO allows employees to defer their pension beyond 58 years. If you choose to delay your pension up to 60 years and continue contributing to the Pension Fund, your pension increases by 4% per year for the delayed period.

• At 59 years: Pension increases by 4%.
• At 60 years: Pension increases by 8%.
• The calculation for your pension also includes your salary and service period beyond 58 years.

EPFO Early Pension Option (50–58 years)

Employees between the ages of 50 and 58 can opt for early pension, but this reduces the pension amount by 4% per year for each year before 58.

Example:

• If you claim your pension at 56 years, you will receive 92% of your entitled pension (100% - 2×4).

To claim early pension, you need to submit the Composite Claim Form and choose Form 10D.

What if You Are Under 50?

If you have completed 10 years of service but are under 50 years of age, you cannot claim pension yet. Instead, you can only withdraw the accumulated funds in your EPF account.

EPFO Pension for Less Than 10 Years of Service

If your service period is less than 10 years, you are not eligible for a pension. Here’s what you can do:

1. Withdraw EPF and Pension Contributions: Claim your accumulated funds.
2. Obtain a Pension Scheme Certificate: If you plan to work again in the future, this certificate can link your previous EPFO account to your new job. This way, you can complete the required 10 years of service and become eligible for a pension at 58.

Key Takeaways

• Delay Pension: Extend to 60 years for an 8% higher pension.
• Early Pension: Reduces by 4% for every year before 58.
• Service Period Completion: Ensure 10 years of contributions to qualify for a pension.
• Plan Smartly: Obtain a Pension Scheme Certificate to link old and new EPFO accounts if switching jobs.

This strategy can help you optimize your EPFO pension and secure financial stability post-retirement.