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Ramalingam

Ramalingam Kalirajan  |9309 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 26, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Umesh Question by Umesh on Dec 28, 2023Hindi
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How long can I keep my EPFO account after retirement? And whether the interest for that period shall be taxed?

Ans: Your EPF Account After Retirement: Keeping it Active and Tax Implications
Good question! Here's what you need to know about your EPF account after retirement:

Can you keep your EPF account active?

Yes, you can! Your EPF account doesn't automatically close upon retirement.
But there's a catch!

If no contributions are made for more than three years after retirement, the account becomes inoperative.
What happens to an inoperative account?

It stops earning interest.
The existing balance remains safe.
Here's the good news!

You can still claim the accumulated amount (balance + interest earned till it became inoperative) anytime.
Tax on interest after retirement:

If you've completed five years of continuous service, any amount withdrawn from your EPF account (including interest), after retirement, is generally exempt from tax.
Remember!

There are some exceptions to tax exemption. Consulting a Certified Financial Planner (CFP) can help clarify your specific situation.
Thinking about withdrawing your EPF?

Consider your financial needs and other retirement income sources.
Withdrawing your EPF reduces your retirement corpus.
Talk to a CFP!

They can help you make informed decisions about managing your EPF after retirement and planning your golden years.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |9309 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 08, 2024

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Hi Sir, I have stopped EPF contributions wef Sept 23 due to end of my regular job at age of 57. Do I need to withdraw exactly as soon as I complete 58? Or I can park the money in EPFO to earn interest and withdraw when I require later? Do I need to
Ans: You're making prudent considerations regarding your EPF contributions. Let's discuss your options:
Withdrawal Timing:
• You have the flexibility to withdraw your EPF balance after the age of 58, as per EPFO regulations. There's no mandatory requirement to withdraw immediately upon turning 58. You can choose to keep the funds parked in your EPF account to continue earning interest until you require them.
Interest Earnings:
• By leaving your EPF balance untouched, you can benefit from accruing interest on your savings. EPF offers competitive interest rates, providing an opportunity for your funds to grow over time. This approach can be particularly advantageous if you don't have an immediate need for the funds and wish to capitalize on their earning potential.
Withdrawal Considerations:
• While you have the option to retain your EPF balance and withdraw it at a later date, it's essential to evaluate your financial goals and liquidity needs. Consider factors such as your retirement plans, anticipated expenses, and other sources of income. If you foresee a need for funds in the near future, withdrawing from your EPF account may be a viable option.
Financial Planning:
• As you navigate this decision, consider consulting with a Certified Financial Planner (CFP) who can provide personalized guidance based on your specific financial situation and goals. A CFP can help you assess the pros and cons of retaining your EPF balance versus withdrawing it, taking into account factors such as taxation, inflation, and investment alternatives.
In summary, you have the flexibility to decide when to withdraw your EPF balance after the age of 58. While retaining the funds in your EPF account allows you to continue earning interest, it's essential to weigh this option against your financial needs and objectives. By carefully evaluating your circumstances and seeking professional advice, you can make an informed decision that aligns with your long-term financial well-being.

..Read more

Ramalingam

Ramalingam Kalirajan  |9309 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 30, 2024

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I retired from service on 31 July 2022 on attaining the age of 60 and my contribution to EPF stopped thereon. I have not withdrawn the EPF amount till date. When I checked "My Passbook" in EPF site, I find the interest till 31/03/23 only credited. The closing balance as on 31/03/24 is the same figure as of 31/03/23, also, "Interest details N/A" is indicated against figure for 31/03/2024. My question is - Is there any time limit for retention of amount in EPF, even after the age of 60, and for how long interest will interest accrue for this amount. P.Raghunath Palakkad, Kerala
Ans: Interest Accrual on EPF
Interest Calculation: EPF continues to earn interest even after retirement.
Time Frame: Interest is credited until three years post-retirement.
Passbook Details: Check for updates periodically for interest credits.
Withdrawal Process
No Immediate Withdrawal Needed: You are not required to withdraw immediately.
Flexibility: You can withdraw your EPF anytime as per your convenience.
Form Submission: Use the correct forms to process withdrawals.
Retention Period
Interest Duration: Interest accrues for three years post-retirement.
Inactive Account: After three years, the account is marked as inactive.
Interest Stoppage: No interest is earned on inactive accounts.
Monitoring Your EPF
Regular Checks: Check your EPF passbook regularly.
Update Issues: Sometimes updates may be delayed, so check periodically.
EPF Website: Use the EPF portal for accurate information.
Final Insights
Interest Earned: EPF continues to earn interest for three years post-retirement.
Inactive Accounts: After three years, the account becomes inactive, and interest stops.
Withdrawal Flexibility: You can withdraw your EPF anytime as per your needs.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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