If you’re salaried and planning for retirement, two of the most powerful tools at your disposal are:
- Employee Provident Fund (EPF) — Government-backed, guaranteed returns
- National Pension System (NPS) — Market-linked, long-term compounding
By combining these and contributing consistently from age 30, experts say you can build a ₹12 crore corpus by 60, with minimal or no tax.
The ₹12 Crore Retirement Plan
Based on estimates shared by wealth advisor Sujit Bangar (via News18):
- Start investing ₹12,500/month in both EPF and NPS at age 30
- Assume 8% annual salary growth and steady contributions
- EPF grows at 8.25% annually; NPS at 9–11%
- By age 60, EPF ~₹4.74 crore + NPS ~₹7.42 crore = ₹12.16 crore
Source: News18
Why This Combo Works
EPF: Stability & Tax-Free Growth
- Contributions up to ₹1.5 lakh/year qualify for Section 80C
- 8.25% annual return (subject to revision)
- Maturity corpus is tax-free after 5 years
NPS: Growth + Extra Tax Benefits
- Returns are market-linked (~9–11% historically)
- Get additional ₹50,000 deduction under Section 80CCD(1B)
- On maturity: 60% withdrawal tax-free, 40% goes into annuity
Is ₹25,000/month Too Much?
Yes, for many. But this is just a model. Start small and scale up:
- Even ₹5,000/month in EPF+NPS for 30 years at 10% = ₹1.14 crore
- Voluntary Provident Fund (VPF) can be added to EPF contributions
Limitations
- Liquidity: Both EPF and NPS are long-term, non-liquid instruments
- Annuity Lock-in: 40% of NPS must be annuitized
- Market Risk: NPS returns are subject to market performance
- Discipline Needed: Regular investments are key
Sample Retirement Plan (2025–2055)
| Year | EPF Contribution | NPS Contribution | Total Annual | Estimated Corpus |
|---|---|---|---|---|
| 2025 | ₹1.5L | ₹1.5L | ₹3L | ₹3L |
| 2035 | ₹3.23L | ₹3.23L | ₹6.46L | ₹42L+ |
| 2055 | ₹8.5L+ | ₹9L+ | ₹17.5L | ₹12 Cr+ |
MyFirstLakh’s Review
This strategy works best for:
- Young salaried professionals (30–45 years)
- Those seeking tax-saving + disciplined compounding
- People comfortable locking funds till retirement
Our View:
- Pros: High long-term return potential + tax savings
- Cons: Low liquidity, mandatory annuity in NPS
Conclusion
You don’t need to be rich to retire rich. Combining EPF and NPS with consistent investing from your 30s can build a ₹12 crore tax-efficient corpus by retirement.
Start small. Stay consistent. Let compounding work its magic.
Read original source: News18
