PF deducted from your salary, how much pension will you give in old age? Understand the complete mathematics, because most of the people are deceived

Have you ever stopped to think how much of the Provident Fund (PF) money that is deducted from your salary every month will come back as pension every month after your retirement? If not, then this news is very important for you, because about 7 crore employed people of the country are members of PF, but most of them do not know how their pension is calculated.

Let us understand this mathematics in simple language today.

PF money: one piggy bank, two parts

Consider the PF deducted from your salary as a piggy bank, which has two parts. is a part EPF (Employee Provident Fund)which you get as a lump sum at retirement. the second part is EPS (Employee Pension Scheme)whose money you get as pension every month after retirement.

How much money goes into the pension account?

There is a big catch here. Out of the 12% that your company deposits in your PF, 8.33% goes to your pension (EPS) account.

But wait! This 8.33% is not your entire salary. The government has set a limit from September 2014. Whether your salary is Rs 50,000 or Rs 1 lakh, every month you can get maximum amount in your pension account (EPS). ₹1,250 Can only be collected. If 8.33% of your company’s share is more than this, then the remaining amount goes to your EPF account, which you will get together on retirement.

Will everyone get pension? No!

It is also very important to know that not every PF member gets the benefit of pension. The rule is clear:

• If you have joined the job after September 2014 and your basic salary More than ₹15,000 per month If so, then you are out of the scope of Pension Scheme (EPS).
• In such a situation, the entire 12% of your company’s share will go directly into your EPF account, that is, you will not get pension, but you will get a higher lump sum amount on retirement.

So how much pension will you get?

Now coming to the biggest question. How much your pension will be depends on how many years you have worked.

As per existing rules, minimum pension under EPS ₹1,000 per month And the maximum pension is approx. ₹7,500 per month can happen till Yes, ₹7,500! Many people think that their pension will be very high, but the truth is because the contribution limit is fixed.

The biggest confusion: Will the entire PF be converted into pension?

no way! This is the biggest misconception. You get pension only from the EPS portion, which is a very small amount. You will get all your remaining PF money (12% of your contribution + the remaining part of the company’s contribution) at the time of retirement.

Therefore, it is not wise to rely only on PF pension. If you understand these rules today, you will be able to plan better for your old age.

So check your EPF and EPS status today and see how much your old age pension has been saved!