For salaried employees, checking the PF balance is usually a routine part of keeping track of their savings.
Have you ever taken a pause and thought about how much those regular monthly contributions could grow into if you simply let them stay invested for 25 years?
Even a small amount set aside every month can build into a sizeable retirement corpus over time.
To understand it better, look at this example:
Amit, a 30-year-old working in the private sector. Rs 7,000 is put into his EPF account every month.
His PF earns an annual interest rate of 8.25% for the next 25 years, and Rs 7,000 is deposited every month. At the end of 25 years, his PF balance can amount to around Rs 69.3 lakh.
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The exciting part is that Amit would have put in only Rs 21 lakh in these 25 years, while the rest would be through interest.
What Happens On Withdrawal?
In case, Amit requires Rs 2 lakh after serving for 10 years. He plans to withdraw Rs 2 lakh from his PF account to renovate his house.
Even though it may appear that Rs 2 lakh is not such a big amount considering Amit's total retirement corpus. But with the same interest rate, the Rs 2 lakh could have become approximately Rs 6.86 lakh in the next 15 years.
In other words, just one withdrawal of Rs 2 lakh can cost him approximately Rs 4.86 lakh.
Why Leaving Your PF Untouched Matters
EPF is not just another salary deduction. It is a long-term savings tool that benefits from regular contributions and compounding.
Of course, emergencies can happen, and PF withdrawals are allowed under specific conditions. But withdrawing money for every major expense can reduce your retirement savings significantly.
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