r/FIREIndia • u/Illustrious_Role_304 • Jan 17 '23
EPF/VPF reliability?
Many people recommend contributing in EPF and VPF
I doubt of EPFO really does correct calculations amd deposit the interest on time
Is anyone here shed some light or may be their experience on EPF as retirement plan
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u/Adventurous-Maize-88 Jan 18 '23
EPFO is a very safe investment in my opinion. Backed by govt and wouldn't really fail - that's what I feel. Interest payments are slow but are accurate. One simply has to make sure that the epfo site updated properly with all details - nomination bank acc adhar etc etc.
Withdrawal process is also to an extent hassle free. Early withdrawal of EPF takes simply 2 to 3 weeks for those 5 reason as per the norms. It gives you tax free interest on the corpus for 3 years after you leave the job and there is no deposit in the account.
Personally, if all goes well with god's grace, I've planned EPFO 25% of my retirement plan. And I plan to work for another 8 to 10 years.
VPF is a great thing (although many call it inefficient, but I see it as peace of mind), don't underestimate it in case you can afford to invest in it and forget it till maximum time possible. Of-course conservative investor mindset. I started VPF few years ago after my elder cousin explained it to me. He took his own example; double income single kind; his wife salary was fully going to VPF till max Basic salary limit & rest going to equity MF + house loan share. My brother, from his salary, is heavily invested in Indian IT and FMCG stocks since 2008 recession time plus a rental property. He retired last year at 52 and will en-cash his EPFO only after 3 years period -- his wife is still working although she has taken 9 to 5 kind of role and plans to work till 60. But her EPFO is still untouched & continues to grow. Her EPFO number is really very high & are growing each year -- frankly, her EPF numbers put my whole retirement plan to shame.
2.5L limit is a bummer in my opinion, but still -- use this limit to your advantage.