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PF is not enough for old age, know how

If you are a salaried person, a part of your salary will be compulsorily invested in the Employees Provident Fund (EPF). However, if you are thinking that after retirement your EPF deposit will be enough to meet your needs, then you are making a mistake. This is because most of the money from the EPF fund is invested in debt and government bonds. Because of this, the returns on it will not be enough to beat inflation.

Investment in equity of only 15% of the fund

The Employees Provident Fund Organization (EPFO) started investing in equity from 2015. Initially it was approved to invest 5% of the fund in equity, which was increased to 15% in 2017. The EPFO ​​mainly invests in Exchange Traded Funds (ETFs), which include the Central Public Sector Enterprises (CPSE) ETFs and the Bharat 22 FAFs. However, experts believe that EPFO’s investment in equity is very low. Due to this, it will not be able to beat inflation.

At present, interest at the rate of 8.5 percent

The Employees Provident Fund (EPF) is the most preferred retirement investment with tax exemption benefits. At the moment, the Employees Provident Fund Organization (EPFO) is currently offering an interest rate of 8.5 per cent. At the same time, the EPFO ​​paid 8.65 per cent interest last year. Investing in EPF is not mandatory for employees earning more than Rs 15,000 per month, while those below Rs 15,000 will have to contribute compulsorily. In case of EPF, an employee has to contribute a minimum contribution of 12 percent of his basic salary per month, which can be increased voluntarily under VPF. EPF comes under the EEE category, which means the interest and maturity amount earned is tax free.

Include equity investment in your portfolio

If you want to create a sufficient retirement fund to beat inflation, then you should start investing in equity, taking a little risk. As you get closer to retirement, start investing in equity investment mode with reduced PF and fixed income. You can understand from this example how equity is able to beat inflation. The Fanclin Index NSE Nifty Fund has given an annual return of 13 per cent in the last 20 years.

Why the need for better return on investment?

Cost of living has increased due to inflation. Therefore, it is important to accumulate enough to live a safe life after retirement. If you start preparing for it with a job, then you can deposit large funds through mutual funds for less investment. Time and continuity is needed to build a large retirement fund. You need to continuously invest in long term instruments so that the power of compounding will work for you and help you achieve your goal of a large retirement fund.

Parvesh Maurya
Parvesh Maurya
Parvesh Maurya, has 5 years of experience in writing Finance Content, Entertainment news, Cricket and more. He has done BA in English. He loves to Play Sports and read books in free time. In case of any complain or feedback, please contact me @
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