How much pension will I get after retirement? You will be surprised to see the shocking calculations of EPFO!

Employees working in the private sector often have a fear about security in old age. But if your PF gets cut, there is no need to panic.

The Employee Pension Scheme (EPS) of the Employees’ Provident Fund Organization (EPFO) is no less than a boon for those doing private jobs. If you are going to retire in the coming few years, say in 2030, then we tell you how much pension you will get every month after retirement.

The money deducted from salary becomes the support for old age.

First of all it is important to understand where the pension money comes from. Every month, PF money is deducted from your salary, a part of it is deposited in your EPF and the other part is deposited by the company. A major portion of the company’s contribution goes to the ‘Employee Pension Scheme’ (EPS).

This accumulated capital later takes the form of pension. However, there are some conditions for this. To be entitled to receive pension, minimum 10 years of service (pensionable service) is required. Usually, full pension is available at the age of 58 years, but if one wants, one can start taking reduced pension (reduced pension) even at the age of 50 years.

Check your passbook and calculate your account like this

The formula for pension calculation may sound difficult, but it is very easy. EPFO’s fixed formula is: (Pensionable salary × total years of service) / 70

The thing to note here is that for pension calculation, your maximum salary limit (Basic Salary + DA) is considered to be Rs 15,000 per month. That means, even if your basic salary is more than this, the calculation will be only Rs 15,000. Years of service means how many years you have contributed to EPS.

How much pension will you get on retirement in 2030?

Understand this entire mathematics with an easy example. Suppose there is an employee Kanhaiya, who is going to retire in 2030. By then his total service will be 25 years. Since the maximum salary for pension calculation is fixed at Rs 15,000, Kanhaiya’s pension will be like this: 15,000 (salary) × 25 (years) ÷ 70 = ₹5,357 (approximately)

According to this, Kanhaiya will get a pension of around Rs 5,357 every month after retirement. Here’s another twist – if Kanhaiya doesn’t wait for 58 years and starts pension from 50 years, he will get 4% less pension every year. Whereas if they postpone pension till 60 years instead of 58, then the pension amount will increase.

Government gave big information in Parliament

The government is also completely active regarding pension. Recently, Minister of State for Labor and Employment Shobha Karandlaje told in Parliament that EPFO ​​has processed about 99 percent of the applications for ‘Higher Pension’. Following the instructions of the Supreme Court, the department is working rapidly. Also, the government made it clear that after the implementation of the new Social Security Code, the contribution above the salary limit of Rs 15,000 will be optional, that is, it will depend on the wishes of the employee and the company.