75 Million Account Holders to Benefit
The new rules will benefit approximately 75 million members associated with the EPFO, who will be able to withdraw larger sums of money as per their needs. This change will particularly help those who do not wish to wait until the age of 58 and want to retire early. Currently, you can only withdraw your entire PF amount upon retirement at age 58 or after remaining unemployed for two months following job termination. Currently, members are permitted to withdraw funds from their PF account for medical expenses, home purchase, children’s education, weddings, and other essential purposes; however, these withdrawals are subject to several conditions and limited to a predetermined amount.But… Significant Drawbacks
Reduced Retirement Savings: If employees withdraw large sums from their PF intermittently, their account balance will naturally be lower upon retirement. Loss of Interest: PF is a means of long-term savings that earns good interest. Withdrawing money prematurely reduces the benefits of compound interest. This means your savings will not grow as quickly. Future Concerns: The financial security provided by PF for post-retirement may be weakened.
