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Strapped for cash? Dip into your EPF corpus only as the last resort

Sell off investments that you possess in a manner that your asset allocation is maintained




The financial hardship unleashed by the crisis — job losses, severe salary cuts, high medical expenses, etc — have led many subscribers of the Employees’ Provident Fund Organisation (EPFO) to withdraw money from their accounts. According to media reports, 80 lakh subscribers of the have withdrawn Rs 30,000 crore between April and the third week of July — an amount higher than the outgo usually seen over similar periods.

On March 28, the Labour Ministry had issued a notification that allowed people to withdraw money from their account to deal with the Covid crisis. Given EPF’s significance as a retirement-saving tool, the decision to withdraw money should be a properly deliberated one.

An invaluable tool

EPF’s primary purpose is to help employees build a corpus. “Due to increasing longevity, people nowadays have a long post-life to take care of. The money should hence be treated as sacrosanct and not touched except in dire circumstances,” says Anil Chopra, group director-financial wellbeing, Bajaj Capital.

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First Published: Fri, October 23 2020. 19:55 IST