In “Paisa Ki Pathshala,” tax and investment expert Balwant Jain explains in detail the rules for EPF withdrawal and interest earned after retirement. If you’re about to retire at the age of 58, it’s crucial to understand these important rules regarding PF withdrawal.
1. Key rules for PF withdrawal
Lump Sum Withdrawal: After attaining the age of 58 and retirement, employees can withdraw all of their EPF deposits at once (a lump sum). There is no option for installment withdrawals.
Take help from company HR: Not everyone is fully aware of the PF withdrawal process, hence employees are advised to take help from their company’s HR department for proper paperwork and submit all the required documents on time.
2. Post-retirement interest and deadline rules
Interest is only available until age 61: After retirement (at age 58), employees can keep their funds in their EPF account if they wish. However, it’s important to note that interest on the account is only available for 3 years (36 months) (i.e., until age 61).
Account becomes inoperative: After the age of 61, the EPF account goes into the inoperative category, after which the interest accrual in it stops completely.
Conclusion and wise action
Since interest on your account stops accruing 36 months after retirement (after age 61), it’s advisable to complete your PF claim process on time. Timely withdrawals not only avoid unnecessary delays but also allow you to reap the full benefits of your funds by investing them optimally.