EPF+NPS calculated as Rs 833 crore: Rs 32,000 base salary, DA, 26? Know how to generate CR retirement fund of Rs 8.33 at 60
EPF+NPS Retirement Corpus: Private sector employees can contribute to the employee’s provident fund (EPF) and the National Pension System (NPS) to generate a retirement corpus and receive a monthly pension. If you take advantage of these opportunities to meet good investment limits, you can generate a combined corpus of Rs 833 crore at the age of 60. Not only that, you can also get an estimated monthly NPS pension of Rs 1,40,000 and an estimated employee pension scheme (EPS) pension of nearly Rs 7,300. Know how this is possible –
EPF donates to employees
EPF is a retirement plan for private sector employees who can contribute at least Rs 1,800 per month.
The maximum investment can account for 12% of its base compensation and precious allowance (DA).
The employer also meets the amount and contributes to the employee’s EPF account.
The employee receives a compounded interest rate of 8.25% per month.
Employers’ contribution to EPS
All employers contribute up to 12%, but are not used for EPF accounts.
Only 3.67% of the EPF contributed; the rest was attributed to the employee’s pension plan (EPS).
The maximum employer contribution to EPS is Rs 1,250 per month, so the maximum pensionable salary is Rs 15,000.
The employee receives a monthly pension amount based on the current interest rate in the retirement year of 58, up to Rs 7,500.
If they want, they may choose early and late pensions at proportional tax rates.
Employees can withdraw their EPF corpus when they retire at the age of 58.
NPS donations
Private sector employees can contribute up to 10% of their base salary and donate to their NPS accounts.
Optional employer contributions up to 14% of the same account.
The amount is invested in a combination of equity and debt, where stocks can reach up to 75% and debts can reach up to 100%.
NPS withdrawals at retirement
When retired, employees can withdraw 60% of their retirement corpus. Starting with the remaining 40%, they need to purchase an annuity plan from which they help their monthly pension.
NPS tax incentives, EPF for the new tax system
In the new tax regime applicable to fiscal year 2025-26, employees can receive tax benefits for employers’ EPF contributions, accounting for 12% of their base salary and DA.
In the same system, they can get first-level donations from their employers at up to 14% of their employee base salary and tax rates of DA.
Calculation of the story
Used for EPF calculations
Basic salary and Rs 32,000
Age – 26 years old
Donate to 60 years
Monthly contribution – 100% basic and DA
Contribute annual growth -5%
Interest rate -8.25%
Used for NP calculations
Basic salary and Rs 32,000
Age – 26 years old
Donate to 60 years
Monthly donations (employees) – 10% basic and DA
Monthly donations (employer) – 14%
Portfolio Model (75% equity and 25% government bonds)
Contribute annual growth -5%
Expected Return (before retirement) – 12.1
Annuity returns 6.75%
One-time extraction – accounting for 60% of the blood bank
Annuity purchase – 40% corpus
result
EPF Corpus
Total investment – Rs 54,34,762
Total interest 1,56,40,525
Retirement – rupees 2,10,75,287
EPS Pension-RS 7,285.71
NPS Corpus
When the employer does not contribute
Total 2,48,64,300
One-time withdrawal – 1,49,18,580
Annuity value – 99,45,720 rupees
Pension Amount – Rs 55,945
When an employer contributes
Total 6,21,60,751
One-time withdrawal – 3,72,96,451
Annuity value of 2,48,64,300
Pension Amount – Rs 1,39,862
Minimum EPF+NPS corpus combination
Rs 2,10,75,287+Rs 2,48,64,300 = Rs 4,59,39,587
Minimum EPF+NPS corpus combination
Rs 2,10,75,287+Rs 6,21,60,751 = Rs 8,32,36,038
(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning.)
