Are you tired of living paycheck to paycheck? Does your dream of having long-term savings seem far away? We understand how you feel. Receiving a paycheck every month and looking at it go away at bills and other necessities is an inevitable cycle that we all want to break.
Having a salaried job is not enough, what you need for a secure future is an EPF Pension Calculator. If you contribute to EPF, then an EPF pension calculator will help you figure out how much you will have by the time you retire. All you need is your monthly salary and the duration for which you will contribute. You can find many EPF pension calculators online where you can get this calculation.
Here, we discuss everything about EPF, its calculation, and the benefits of an EPF pension calculator.
What is an EPF Calculator?
The EPF pension calculator is a simple tool showing how much your retirement funds would be worth in different scenarios. You can use an EPF retirement calculator by setting up the annual contributions with interest rates. This can be done easily from your mobile.
The EPF calculator helps you see the various ways to grow your retirement corpus and reach your goal. The EPF calculator India allows you to specify the option that best matches your current income and investment profile and estimates how much you must save every month to meet a specific financial goal.
How Does an EPF Calculator Work?
To get a better understanding of how the EPF pension calculator works, it is better to consider an example.
Let’s assume that your basic salary and all allowances total up to Rs 14,000. Then you will be paying a 12% towards your EPF, or Rs 16,80. Your employer will contribute 3.67% towards your EPF account. That means Rs 514, in this case. Your employer will also contribute 8.33% (Rs 1,166) towards the EPS of the employee.
Now, the interest rate for the ongoing fiscal year is 8.1%. That means the interest rate that would be applicable every month would be 0.675%.
These are the basic facts. Now let’s assume you have been working at your company since April 2019. Then the total EPF contribution for the month of April is Rs. 2,194.
Now, the EPF contribution for May will be Rs 4,388 (Rs 2194 + Rs 2194). You will be receiving an interest of Rs 4,388 * 0.70833% = Rs 31.08.
For the following months, the EPF contribution can be calculated in a similar fashion.
- Save money for your retirement by making monthly payments to your pension
- The key components determining the requirement to pay to EPF are the employer, the employee, and the salary
- The government manages a provident fund, which has established base contribution amounts
- EPF calculators are available online free of charge
How to Use the EPF Calculator?
Using the EPF Calculator is a simple process, let’s understand it better.
- Provide your current age.
- Fill in the required details like the basic monthly salary and the dearness allowance.
- Know that you need to provide at least 12% to your EF account. This percentage might increase if you are contributing to the Voluntary Provident Fund.
- Provide the retirement age. This can be up to a maximum of 58 years.
- Provide the current EPF balance if you are aware of the amount.
- The EPF pension calculator will help in PF pension calculation and let you know the EPF funds that will be available when you retire
Benefits of Using the EPF Pension Calculator
There are a number of benefits of using an EPF pension calculator. Some of them are listed below.
- Easy to use: There are several benefits of using an EPF calculator online as it is user-friendly and straightforward. You can also avoid mistakes and never get incorrect calculations on your investment returns while using an online EPF calculator.
- Helps in achieving financial goals: You earn more than you spend, and investing in an EPF helps you achieve your financial goals. The online EPF interest rate calculators will show you the rate of return on your investment while at the same time they also calculate the total accumulation of your savings, providing you with a payment schedule and an estimated maturity value.
- Reduce the burden of manual calculation: You can reduce the burden of trying to calculate your EPF interest manually. You do not need to bring out your calculator, worry about forgetting essential calculations, or try to find a long-forgotten mobile calculator that is locked out somewhere.
Did You Know?
EPFO’s total workforce, encompassing all levels, is currently around 20,000.
What You Must Know About EPF Contributions?
Before you start using an EPF calculator or making contributions to this account, there are some things that you must keep in mind.
- The employee contributes 12% of their basic salary towards their EPF account. In addition to this, the employer also contributes their own 12% share to the account. As a result, a total of 24 % of an employee’s basic pay is invested in the EPF scheme.
- The EPF interest rate is decided and set on a yearly basis. As of now, for the financial year 2022-23, this interest stands at 8.10%.
- As per the law, any organisation that has 20 or more people working under them has to register with EPFO. They are expected to give their employees EPF benefits. In addition to this, the laws also claim that any working employee with a salary of Rs 15,000 or above has to be a part of the EPF program.
- You can withdraw your EPF funds in three different possibilities.
- If you turn 58 years old.
- If you have been out of work and haven’t had any steady source of income for two months or more.
- If you meet an unexpected demise, then the entire EPF fund is handed over to your appointed nominee.
- If your EPF account has been inactive for more than 3 years, you will still be awarded interest on your deposit amount in the same manner as you did before. This will continue until you reach the age of 58 years. This is what makes EPF the perfect tool to prepare for retirement.
- If you are investing in an EPF scheme, you are exempted from taxes. That’s because it falls under the EEE (exempt-exempt-exempt) category.
How to Check PF balance?
Checking PF balance is a relatively easy process. Here are the steps to follow.
Step 1. Go to the government EPF portal.
Step 2. Choose the location (state, regional branch office) of your PF office.
Step 3. Complete the online form by providing all the necessary information about yourself as well as your EPF account, as shown on your payslip.
Step 4. Once you verify all the details you have verified, submit the form.
Step 5. Once you have completed the whole process, you will receive your EPF balance by SMS to your phone number.
Word to Remember
Each user, who participates in the EPF system, is granted a 12-digit number called a Universal Account Number (UAN). This unique number is issued to every employee to prove their participation in the EPF system. Applying for the UAN will help you keep track of your EPF funds and enable you to withdraw the PF.
How to Transfer EPF Money Online?
Now that you know how to calculate epf pension, you can follow the steps listed below to transfer your EPF money online.
- Login to your EPF account using your personal details such as UAN and password.
- Under the ‘Online Services’ section, select the ‘One Member-One EPF Account (Transfer Request)’.
- Ensure that all of your given personal information, as well as the present PF account details, have been thoroughly verified.
- Select the ‘Get Details’ option. This will display all the PF account details of your previous employment.
- Pick one of your employers (former or present). Then give your much-needed Member ID as well as UAN wherever necessary.
- Select the ‘Get OTP’ option so as to get the OTP on your registered phone number. Once you receive the OTP, enter and submit it to complete the identity authentication process.
- Once you complete the authentication, you will receive an online filled-in PF transfer request form. This needs to be self-attested. Then you need to submit it to your employer in a PDF format. The employer will get an online message regarding the EPF transfer request.
- Now it is up to the employer to approve the PF transfer request online. It is only after this approval is done, the PF is transferred online to the new account. You will get a tracking ID for the whole transaction.
What are the Benefits of EPF?
After learning about the importance of an EPF account, you must be wondering about what its benefits are. Here’s how having an EPF account will help your financial future.
- EPF will ensure that you receive a steady income even after you retire.
- You will receive life insurance covered under this scheme.
- If you decide to withdraw the EPF at the time of your retirement, you will receive both the EPS as well as the EPF.
- You can withdraw this amount even before you retire. This is possible in the case of an emergency, such as unemployment, a wedding or a loan payment.
- If you nominate a family member, they will receive the amount in the case of your untimely death.
What are Some of the Important Factors to Know About EPF?
- You, as an employee, contribute 12% of your basic monthly salary towards your EPF. Your employer has to contribute 12% of your salary as well to your EPF. However, 3.67% of this is for EPF contribution. The remaining 8.33% is for EPS.
- If you are earning less than or equal to Rs. 15,000, then it is compulsory for you to contribute towards your EPF. However, if your salary is above Rs. 15,000, you can choose to contribute or not. There is no strict regulation as such.
- You can avail tax benefits for the contributions you make towards your EPF. Under Section 80C of the Income Tax Act, you can avail of upto Rs. 1.5 lakhs per annum.
- You can access the lumpsum EPF amount only after you retire. However, you can still have partial access, if you have significant reasons such as loan repayment, educational purposes and many more.
Your EPF prepares you for your post-retirement life. As part of this scheme, you as well as your employer both contribute 12% of your basic salary towards your EPF. Over time, with interest acting on it, this fund becomes big enough to provide for your post-retirement life. Now, if you want to know how much you will have when you retire, then you should use an EPF pension calculator for pf pension calculation.
An EPF pension calculator is a program that shows you how much money you’ll have in your EPF account at the time of your retirement from the workforce. The EPF pension calculator helps how to calculate the EPF pension lump-sum amount, which includes both your and your employer’s contributions, as well as the investment’s accrued interest.
Under the Employees’ Provident Funds and Miscellaneous Act, 1952, the EPF runs as the primary scheme for pension benefits. Both the employee and the employer contribute 12% of the employee’s base salary and dearness allowance to the EPF.
The Employee Provident Fund, or EPF, is a private sector retirement benefits scheme for salaried employees. The EPF is administered by the Employees Provident Fund Organisation (EPFO). The EPFO covers any company or organisation with 20 or more employees.