If you take a pension from EPFO before 58, you will incur a loss, know what is the rule regarding Early Pension.

People who contribute continuously for 10 years in EPFO become entitled to a pension. Meaning, that after retirement, they can get a pension from EPFO. How much pension will be, it is decided on the basis of their contribution. You can take pension from EPFO at the age of 58. However, if a person wants to take pension early, he gets this opportunity at the age of 50. But the sooner you take pension from EPFO, the more loss you will incur. Understand here what is the rule of EPFO regarding Early Pension.

According to EPFO rules, if you have contributed to EPFO for 10 years or more and you are entitled to pension, then you can claim for pension after retirement. But if you want to avail the benefit of early pension, then at the age of 50 years you get a chance to claim for Early Pension. But there is a disadvantage for you in this. The earlier you withdraw money from the age of 58, the lesser will be your pension at the rate of 4% for every year.

Suppose an EPFO member claims for pension at the age of 56, then he will get 92% (100% – 2×4) of the basic pension amount. Meaning, the investor has applied 2 years ago, so 8% has been deducted from his pension amount. Similarly, if you claim at the age of 55, you will get 88% of the basic pension and if you claim at the age of 54, you will get 84% of the basic pension as pension. The pension will reduce by 4% every year.

How to claim for Early Pension

To get Early Pension, you have to fill the Composite Claim Form and select the option of 10D. If your age is less than 50 years and you want to take pension, then you will not get this opportunity. In such a situation, on leaving the job, you will only get EPF funds. According to EPFO, the right age to get pension is 58 years. At the same time, it is necessary to be at least 50 years of age for Early Pension.

If you have a job of less than 10 years

If your job period is less than 10 years, then you are not entitled to get pension from EPFO. In such a situation, you have two options. First- If you do not want to work, then you can withdraw the pension amount along with the PF amount, that is, you can make a full and final settlement. The second option is that if you think that you will join a job again in the future, then you can take a pension scheme certificate. In such a situation, whenever you join a new job, you can link the previous pension account to the new job through this certificate. With this, whatever is lacking in the 10-year period of job, you can complete it in the next job and become eligible to get pension at the age of 58.