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Old 3rd December 2018, 17:51   #721
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Default Re: The "Provident Fund" Thread

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Originally Posted by sindabad View Post
Yes it makes sense to split your investment amount between VPF/EPF and NPS.
NPS has dual investment objective i.e. retirement planning and regular pension whereas EPF is solely for retirement planning. If you are above 40 then split could be 50:50. If you are below 40 then you have a long time horizon and hence you can invest a higher proportion in NPS.
Thank you! I turned 40 today, so will do the split .

Last edited by aah78 : 16th January 2019 at 22:28. Reason: Spacing fixed.
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Old 4th December 2018, 00:04   #722
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Default Re: The "Provident Fund" Thread

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That is very sound advice too. Do go ahead and thanks - its less complex than the procedure I was thinking of with a previous job.
Finally managed to transfer my PF to current organization and got the confirmation as well but for some reason PF office need a applications for issuing annexure K. Have submitted a RTI for getting the same and hoping that will act as proff as well for me of transfer. Took me approx 45 days in all to get this transferred.

Thanks everyone for help & advice
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Old 17th December 2018, 16:30   #723
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Default Re: The "Provident Fund" Thread

The interest for the year 2017-18 is still not credited. Even after raising the grievance in August, the only reply I got was "...will be credited soon". What is going on with the PF office?
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Old 16th January 2019, 08:36   #724
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Default Re: The "Provident Fund" Thread

Raised a grievance second time and still the same answer - that interest will be credited once accounts are updated.

More scary news today in ET. Looks like nothing is safe for retirement

Quote:
Provident and pension funds of thousands of middle-class salaried people face the spectre of losing thousands of crores of their nest egg as analysts estimate these funds’ investments in Infrastructure Leasing & Financial Services and group companies to be between Rs. 15,000 to Rs 20,000 crore, said three people familiar with the matter.
Link
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Old 16th January 2019, 18:35   #725
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Default Re: The "Provident Fund" Thread

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Originally Posted by AltoLXI View Post

More scary news today in ET. Looks like nothing is safe for retirement



Link

Does this refer to investments made by accounts held under Regional PF commissioner or are these private PF trusts? Also, is the principal amount held in PF trusts guaranteed in the manner bank FDs are (upto an extent of course)


Scary stuff!
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Old 16th January 2019, 22:04   #726
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Default Re: The "Provident Fund" Thread

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Originally Posted by ajmat View Post
I have the opportunity of withdrawing my PF and reinvesting or letting it remain.

It is a case of taking a calculated risk or letting the capital remain protected with a limited upside.

Any opinions of this?
Further to this, if you are a Foreign Citizen, you can only withdraw when you are 58 years old!
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Old 16th January 2019, 22:47   #727
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Default Re: The "Provident Fund" Thread

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I have the opportunity of withdrawing my PF and reinvesting or letting it remain.

It is a case of taking a calculated risk or letting the capital remain protected with a limited upside.

Any opinions of this?
I was in the same boat from Jan 2016 till I found a new job in April 2017. I resisted the opportunity to withdraw, as there was talk of China crisis, oil crisis, et al. But the sensex did rise by leaps and bounds in that period. And then from April 2018, mutual funds started losing steam.

Net result: did not gain much, but certainly did not lose.
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Old 16th January 2019, 23:34   #728
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Default Re: The "Provident Fund" Thread

I have been a PPF person for a long time now and have no plans of changing that. But recently, a few people have mentioned that PF is better because you can have get more deductions- something to do with Employer contribution. I was under the impression that the upper cap in both cases is the same.

Can someone point me to an article that explains this?
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Old 17th January 2019, 14:25   #729
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Default Re: The "Provident Fund" Thread

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Originally Posted by akshaymahajan View Post
I have been a PPF person for a long time now and have no plans of changing that. But recently, a few people have mentioned that PF is better because you can have get more deductions- something to do with Employer contribution. I was under the impression that the upper cap in both cases is the same.

Can someone point me to an article that explains this?
The upper cap is the same. NPS has additional cap that can be utilized.
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Old 30th January 2019, 16:27   #730
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Default Re: The "Provident Fund" Thread

I did not find a separate thread for PPF, hence I am posting this message here.
Recently I was talking to my friend and he told me something which I found interesting and hence thought of getting opinion from BHPians here.
He said, PPF is very powerful scheme which many of us do not know it's true potential. One of the example he gave was, we can keep investing 150000 per year for 10/15 years and then start withdrawing the partial amount to be used as retirement 'pension' amount. When I asked him to elaborate on this, he could not as even he heard this from one of his friend. But I thought I will do my own calculations and see if this is indeed true.
When I did the calculation, I found the below observations:
1) Invest Rs150000 for 10 years (make sure to invest lump sum amount every year between April 1-5 to get maximum benefit).
2) Start withdrawing Rs156000 from 11th year. This will make sure the lump sum money available at any given point of time is between 21-22 lakhs (which is same as balance at the end of 10th year).

Assumption: 7.75% interest rate.
And I have attached the calculation sheet along with this message.

As per my calculation, if I open PPF in my and my wife's account today and keep depositing Rs150000 for next 10 years, then I can withdraw Rs312000 (that is 26000 per month) from the 11th year onwards. I know, the interest rate may not stay at 7.75 and may go down in the future. But what I want to know is, can PPF be used as one of the pension scheme, especially for those who does not wants to invest in SIP or any equity funds and wants to rely on government schemes alone?
Attached Files
File Type: xlsx PPF.xlsx (11.8 KB, 58 views)
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Old 30th January 2019, 19:34   #731
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Default Re: The "Provident Fund" Thread

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Originally Posted by kavensri View Post
....can PPF be used as one of the pension scheme, especially for those who does not wants to invest in SIP or any equity funds and wants to rely on government schemes alone?
PPF has always been known to be a safe investment, because it's backed by the govt.

One potential flaw in the ointment though, is it's no longer guaranteed whether and how long PPF will retain tax exempt status end-to-end. It's currently EEE: tax-exempt at Contributions, Accumulations (interest earnings) and Maturity, but it may not stay that way in the future. There was already an attempt a few years ago to move it to EET status for part of interest accrued after a certain date (1 April 2016 if I remember right).

It's still a safe instrument, but your earnings may reduce proportionate to taxation in the future, making it a safe but not very lucrative option.

Last edited by Chetan_Rao : 30th January 2019 at 19:38.
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Old 31st January 2019, 10:39   #732
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Default Re: The "Provident Fund" Thread

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Originally Posted by Chetan_Rao View Post
One potential flaw in the ointment though, is it's no longer guaranteed whether and how long PPF will retain tax exempt status end-to-end. It's currently EEE: tax-exempt at Contributions, Accumulations (interest earnings) and Maturity, but it may not stay that way in the future. There was already an attempt a few years ago to move it to EET status for part of interest accrued after a certain date (1 April 2016 if I remember right).
Yes, I remember that when Govt tried to make it EET and had to back off after pressure. But as you said, there is no guarantee that it will not be introduced again!

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Originally Posted by Chetan_Rao View Post
It's still a safe instrument, but your earnings may reduce proportionate to taxation in the future, making it a safe but not very lucrative option.
Understand. But if I am using this as one of the retirement pension option (that is when I stop earning), then I need not worry about the taxation assuming that my total taxable income is less than minimum exemption limit at that time, am i right?
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Old 31st January 2019, 11:04   #733
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Default Re: The "Provident Fund" Thread

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Originally Posted by kavensri View Post
... if I am using this as one of the retirement pension option (that is when I stop earning), then I need not worry about the taxation assuming that my total taxable income is less than minimum exemption limit at that time, am i right?
Absolutely. If you're willing to take lesser risk for lesser returns (understandable for a retirement corpus), there aren't many options safer than PF, plus you also get the benefit of compounding over your investment period.

The better half and I invest in riskier instruments commensurate to our risk appetite, but we always max out our PF contributions first.
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Old 31st January 2019, 11:23   #734
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Default Re: The "Provident Fund" Thread

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Originally Posted by Chetan_Rao View Post
Absolutely. If you're willing to take lesser risk for lesser returns (understandable for a retirement corpus), there aren't many options safer than PF, plus you also get the benefit of compounding over your investment period.

The better half and I invest in riskier instruments commensurate to our risk appetite, but we always max out our PF contributions first.
Thanks for your response.
Btw, I am a risk averse person (may be I got this behavior from my father or I don't know?). So, most of my investmnets are in PF, VPF, PPF, SA, NPS, VVY & SSY as of now. My PF corpus and Gratuity should be good enough to take care of my liquidity requirements post retirement, as I started investing in VPF since i started my career (more than 20 years now). I started PPF account in 2016, which I should have done long back, that is the only regret I have. Otherwise, I feel that I am good with my investments for my post retirement life
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Old 31st January 2019, 15:24   #735
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Default Re: The "Provident Fund" Thread

The interest for my EPF account is still not credited even after 9 months. This even after two grievances with PF office. They claim that the accounts update is happening.

How many of you have still not got the interest credited?
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