I have more than 5 to10+ years to retirement – Should I opt for Higher EPS Pension now?
I have more than 5 to10+ years to retirement – Should I opt for Higher EPS Pension now?
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Disclaimer at the end of the article (NOW or at least after reading this
content)!>
Our suggestions will be NOT to opt for the higher pension owing to the below reasons:
- An amount must be transferred from your EPF account to EPS now, if you are opting for higher pension via EPS. This amount is not available for compounding till your retirement, which will affect the retirement corpus substantially. (This amount to be transferred will vary for every individual - You will have to check with your employer how much amount has to be transferred now).
- Also, further contributions to EPF will also decrease, as this will go towards EPS & which will further reduce the retirement corpus.
- No Flexibility: In EPS there is no lumpsum benefit payable upon death of the person. The wife will get 50% pension throughout their life-time. Whereas, if there is a lumpsum available to you at the retirement, you can decide where to invest that money for pension & spouse will continue to receive 100% money post the life-time of self & after that the invested amount can be returned to the nominee.
- Future is uncertain: EPFO may change the rules anytime which will be disadvantageous to you, perhaps. You may change the jobs, start a business, etc – all these will reduce the pension receivable in EPS.
Disclaimer: We are not experts in EPF / EPS & do not have hands-on experience on the same. It is only theoretical information / inputs gathered from various sources. Please discuss with your employer (Not with your friends) for more details / clarifications.
