Rs 10K/m in EPF vs NPS: Which can give more?

Two popular retirement saving schemes are the Employees' Provident Fund (EPF) and the National Pension System (NPS). Both allow individuals to contribute a fixed amount each month, in this case, Rs 10,000, with an annual increase of 5%. The estimated retirement corpus after 30 years varies between the two schemes.

For the EPF, the interest rate, which is reviewed annually by the government, is currently 8.25%. Assuming no change in this rate over 30 years, an individual starting at age 30, retiring at 60, and continuously contributing until then would have a projected corpus of approximately Rs 4,43,52,549. This figure includes the employee's contribution as well as the employer's contribution, which is 3.67% of the basic salary.

However, it's important to note that the EPF interest rate does change over time, and actual returns may differ from this estimate.

In contrast, the NPS offers an estimated retirement corpus of around Rs 5.30 crore under similar assumptions. This higher figure is largely due to the investment choices available in NPS, which allow investment in different asset classes such as equities, bonds, and government securities. The higher returns from these investments, assuming a 12.7% return over 30 years, contribute to the larger corpus.

Upon retirement, an individual could withdraw 60% of the corpus as a lump sum and 40% as an annuity, resulting in an estimated monthly pension of Rs 1.19 lakh. However, as with the EPF, these figures are based on assumptions and actual returns may vary.