Children Education Saving Endowment Planning in Singapore
A common mistake most parents make is that they forgotten to protect themselves first, so make sure you have sufficient life insurance and income protection insurance in place. After that you will be ready to start planning for your children education saving and your Retirement Planning.
What is Children Education Saving Planning?
An ideal children education saving planning core objective is to ensure there is a lump sum of money, if your children to attend their higher education or university. When planning for your children education, do be aware of the time horizon of your children education. In general, if your child is a baby girl, at her age 18 or 19 you should expect her to go to university. And if your child is a boy, he will be attending his university at age 20 or 21 due to two years of national service. And also take into consideration which university or a professional institution, you want to send your children to. It may be local or overseas university, as the tuition fee differ from school to school. Tuition fee also differ between courses but most noticeably will be between medical and non-medical courses. Lastly take into account on your children living expenses, especially when they are attending oversea university. Expenses like rental, transportation, food, books and daily allowance.
For Example: Estimate Education Cost: 4 Years University Degree Cost
Why Plan for Children Education?
Let’s say you have a child, a baby boy, and at his age 20 you should expect him to go to university. Therefore, you will have 20 years to plan for it. That leaves you with two options, 1st option is don’t plan at all and on his 20th birthday you will pay a lump sum for his tuition fee. 2nd option is to save a little money all the way for 20 years till your son 20th birthday. As this will ensure you having a lump sum of money to fall back on, if your child do decide to attend university. Will you not prefer the 2nd option?
In another perspective, option 1 is to pay money and pay interest, on an education loan, most often from a bank. Option 2 is to save money and earn interest, you will then eventually receive a lump sum pay-out for your children education.
Save for My Children Education with an Insurance Company
Saving with an insurance company on the other hand will be a mid to long term commitment in achieving your children education saving goal. The advantages in saving with an insurance company are firstly; it provides certain coverage for your child and secondly which is the most important that most parents overlooked, waiver of premium when you are unable to earn an income due to illnesses, total disability or death. In recent era, many couples decide to have children at a later age, and very often by the time their first kid is born, they might be in their 40s or 50s. And 20 years of children education saving can be a long time and unforeseen situation may happen. Waiver of premium will help to ensure their children education saving continue without worrying about the premium. Currently insurance companies do provide options in limited premium payment for your children education endowment saving.
One Last Thing
Children education saving planning core objective is to ensure there is a lump sum of money, for your children higher education needs. When planning for your children education, do take into consideration the time horizon, type of university (local or overseas), type of courses (medical and non-medical) and your child’s living expenses. How much to Save for Children Education Planning? The rule of thumb is to save at least 2-5% of your annual income for your child education saving. You may seek help from your friendly financial consultant to help you with your children education planning or contact me for more details. If you want to know more about pre children education planning, please visit my latest updated Insurance and Financial Planning page.
Note: Opinions expressed are solely in Mr. Chan Kong Meng’s personal capacity and neither express the views or opinions of Prudential nor represent any professional advice in Mr. Chan Kong Meng’s capacity as a PACS representative.