Updating my earlier piece where I had asserted that Indian legal system is designed to break the backbone of the salaried and subsidize the rich.
Hail Modi ! Now The Rakshash Modi has come up with an innovative solution to all retirement planning woes, FREE CYANIDE PILLS on your day of retirement. Because if you refuse to take it, he is going to extort 21.1% of your EPFO balance. Already the high inflation would mean that any amount that we save cannot buy anything once we retire. So it better all senior citizens better roll over and die rather than clogging the overpopulated system.
| Interest rate | 8.80% | |||||
| Year | 1 | 2 | 3 | 39 | 40 | |
| Opening Balance | – | 104,400 | 217,987 | 28,062,962 | 30,636,902 | |
| Employer contribution | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | |
| Employee contribution | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | |
| Interest | 4,400 | 13,587 | 23,583 | 2,473,941 | 2,700,447 | |
| Closing balance | 104,400 | 217,987 | 341,570 | 30,636,902 | 33,437,350 | |
| Total over 40 yrs | % of total | |||||
| Employee contribution | 2,000,000 | 6.0% | 4,650 per month | |||
| Employer contribution | 2,000,000 | 6.0% | ||||
| Total Interest | 29,437,350 | 88.0% | ||||
| Tax | (7,064,964) | -21.1% | ||||
| Total balance | 26,372,386 | 78.9% | ||||
Here is a brief calculation that I did. Assuming that you diligently save 50,000/- (4,165/-) every year for the 40 years of service till you retire. Your total savings with interest will amount to 3.3 Cr INR at current EPFO interest rate of 8.8%. If the Rakshash eats 40% (30% + a zillion surcharges + swach Bharat tax etc.) then you will end up 70 Lakh or 21.1% less money than what you had anticipated. So my fellow hard working salaried mules, either work 21% harder or buy cyanide pills.