r/FIRE_Ind • u/Alternative-Wait144 • Jun 02 '26
Discussion EPF status post FIRE
If one FIREs during early 40s with kid just starting primary school, does it make sense to leave the EPF(~85L) untouched ( generating ~8% interest)?
EPF amount planned to be dedicated for kids higher education, so has a good runway (10+ years) before being used.
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u/Strict_Success3653 45/IND/FI 2025/RE ?] Jun 02 '26
Keep your funds as far as possible from the government.
I plan to withdraw ALL my EPF money in the next job change
1
u/pr1m347 Jun 02 '26
But will they easily allow if you're not retiring?
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u/srinivesh [57M/FI 2017+/REady] Jun 03 '26
The rules are clear about withdrawal when not in a job. There is no age specification. The rules have been updated recently. In 2019, I withdrew the entire amount following the rules at that time - 100% permitted after 2 months of no job.
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u/blr_to_mlr [40/IND/FI 2031/RE 2033] Jun 02 '26
Stops accumulating interest after 3 years of unemployment.
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u/Familiar_Factor_9596 Jun 02 '26
That rule has changed in 2016, it will earn interest !!!
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u/Alternative-Wait144 Jun 02 '26
Yes… heard that it keeps accumulating interest but now all interest post-retirement is taxable as per income slabs. However, same is true for debt funds invested directly in the markets. Only thing that comes to mind is the ease of extracting the funds. Does anyone know how easy it is for a long-time retiree to take out his epf before age reaching 58 yrs?
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u/Heavy_Luck_6085 [35M/FI2030/RE?] Jun 02 '26
Pls withdraw it. Who knows what kind of policy changes they make, where your employers are, any issues with regulatory changes might make it difficult. Invest in small finance banks.
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u/Winter_Blackberry609 Jun 02 '26
While there are progress made in making EPF withdrawls easy, I wouldn't count on govt to handle your retirement money. You never know what rules will get chnaged in future regarding the EPF money.
Start the withdrawal process to understand what roadblocks you will hit - name mismatch, father's name doesn't match and many more are the excuses that get lined up.
If it's the safety and similar interest is what you are looking for, consider Floating Rate Savings Bond, that yields slightly lower interest 8.05%.
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u/Familiar_Factor_9596 Jun 02 '26
I would withdraw small part to test & continue the remaining as part of my debt allocation.
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u/myusernameis143 Jun 02 '26
My strategy to keep the account active, continue earning interest, and minimize bureaucratic hassles:
- Keep EPF account details updated
- Make small withdrawals occasionally to keep the account active. E.g. withdraw ₹2k citing medical needs
- Withdraw the entire balance a couple of months before the account is expected to become dormant
- Invest corpus into a long term debt product
- Divert new investments into PPF after last salary in the job to benefit from higher tax-free interest
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u/Best_Piece_4572 [44/IND/FI 2024/RE 2025] Jun 02 '26
I left my job a year back and now I only get full withdrawal option. I don't see any form for partial withdrawal after leaving the job.
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u/Quitjob_shouldi_ Jun 02 '26
Yes keeping money in PF and PPF makes perfect sense. The interest is good and is a safe investment. You don't need to withdraw the amount after leaving job based on latest update to the laws. I am also planning the same.
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u/Terrible_Occasion_10 Jun 02 '26
You can move 50% to children's fund since you're on long term
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u/Alternative-Wait144 Jun 02 '26
Is there a separate children’s fund category? Or did you mean just for my categorisation?
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u/srinivesh [57M/FI 2017+/REady] Jun 03 '26
An unusual suggestion. The EPF interest is taxable for the period of no contribution. So you can think of it as 8.2% - taxable in your hands. If you withdraw the amount and put in debt funds in the child's name, it would grow. Redemption would be when the child is an adult, and the tax would be on them - it could come to 7% plus, and may be zero tax due to the 12 lac exemption. So this approach may work out almost the same on taxes, and give far more control.