Confused about EPF contribution after 58?

Ans: 1. You can withdraw up to 75% of the net balance in your EPF account, or three months of your basic salary plus dearness allowance, whichever is lower.
2. You can withdraw 100% of your EPF amount if you are unemployed for more than two months as per old rule.
3. You can withdraw up to 50% of your EPF amount for the marriage of your child or for their education after class 10.
4. You can withdraw up to 90% of your EPF amount if you are 54 years of age or above.

There is no maximum limit for the amount that can be withdrawn from your EPF account. However, you will need to pay income tax on the amount withdrawn if you have not contributed to your EPF account for at least five years.

The amount can be left in your EPF account after the contribution stops for an indefinite period of time. However, if you do not withdraw the amount after a certain period of time, it will be transferred to the Employees' Pension Scheme (EPS).

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.

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

Ans: As stated by EPFO, members transaction less account (except interest credit) will be inoperative after 36 consecutive months of no contribution.

Hence it is advisable that you withdraw your EPF corpus and invest in other avenues.