Kids Education Plans

[zzzzzz87]

Hi all. Any recommendations for kids education plans?

Time frame is 16 and 18 years.

Thanks!

 

[winthony]

Hi all. Any recommendations for kids education plans?

Planning for 16 and 18 years.

Thanks!

are you talking about savings/endowment plans?

 

[boredboiboi]

Hi all. Any recommendations for kids education plans?

Planning for 16 and 18 years.

Thanks!

U means ur kid is 16 and 18 years old
Or the time frame for each kids is 16 and 18 years?
Most insurers has such plan. But i usually recommends alternative plan that has more flexibility.

 

[zzzzzz87]

U means ur kid is 16 and 18 years old
Or the time frame for each kids is 16 and 18 years?
Most insurers has such plan. But i usually recommends alternative plan that has more flexibility.

hi. i mean time frame is 16 and 18 years.

what do you recommend?

 

[boredboiboi]

hi. i mean time frame is 16 and 18 years.

what do you recommend?

First, education plan will start payout usually at age 16 onwards then expire at age 21 or 23 depends on which u choose.

But what if at that point of time u dont need the sum and wants to continue to grow the money?

I will recommend plan that allows you to continue grow your money even if you dont need to money and flexibility to withdraw. Various ways to do it.

 

[zzzzzz87]

First, education plan will start payout usually at age 16 onwards then expire at age 21 or 23 depends on which u choose.

But what if at that point of time u dont need the sum and wants to continue to grow the money?

I will recommend plan that allows you to continue grow your money even if you dont need to money and flexibility to withdraw. Various ways to do it.

how's the rate of return like?

 

[boredboiboi]

how's the rate of return like?

Endowment and the rest of the guaranteed returns plan usually is about 2 to 3%(guaranteed + non guaranteed).
If want anything higher, u have to look at plan with longer term to grow ur return. Above 20 years can have return near 4%

 

[winthony]

hi. i mean time frame is 16 and 18 years.

what do you recommend?

are you looking to pay off the tuition fee in lump sum? aka, at the end of 16 & 18 years, you are looking to be able to take all the money you required?

 

[zzzzzz87]

Endowment and the rest of the guaranteed returns plan usually is about 2 to 3%(guaranteed + non guaranteed).
If want anything higher, u have to look at plan with longer term to grow ur return. Above 20 years can have return near 4%

hi. 4% includes guaranteed + non guaranteed? how about guaranteed on its own? what plans do you recommend?

 

[zzzzzz87]

are you looking to pay off the tuition fee in lump sum? aka, at the end of 16 & 18 years, you are looking to be able to take all the money you required?

good idea also.. then perhaps the time frame can be 20 years instead.

 

[BBCWatcher]

The other general approach is to continue your diligent saving and prudent investing in a few low cost, long-term vehicles. However, you can "tweak" the portfolio allocations to reflect the fact that you'll be withdrawing a certain sum to pay for tuition substantially before you retire (if that is the case).

Another possible approach is to use CPF in certain ways. Why CPF? Because on your 55th birthday, assuming you have surplus funds, you'll have some funds available for withdrawal. Age 55 can work out pretty well for university tuition purposes if your child was born when you were in your mid 30s or later. So take a look at CPF top ups, such as MediSave Account and Special Account top ups for tax relief, in light of university funding needs. No, the top ups themselves (and interest) cannot be withdrawn at age 55, but "a rising tide can lift all boats" as it were. Funds in excess of the CPF Full Retirement Sum on your 55th birthday will be available for withdrawal for any purpose, including university tuition. Even repaying a CPF Ordinary Account and earning 2.5% is pretty darn good, especially if your children are not too far away from university.

 

[boredboiboi]

hi. 4% includes guaranteed + non guaranteed? how about guaranteed on its own? what plans do you recommend?

Long term endowment. 4% yes guaranteed + non guaranteed.
If only look at guaranteed alone then you will most probably not like any plan as it is not the way to look at for endowment plan

 

[zzzzzz87]

The other general approach is to continue your diligent saving and prudent investing in a few low cost, long-term vehicles. However, you can "tweak" the portfolio allocations to reflect the fact that you'll be withdrawing a certain sum to pay for tuition substantially before you retire (if that is the case).

Another possible approach is to use CPF in certain ways. Why CPF? Because on your 55th birthday, assuming you have surplus funds, you'll have some funds available for withdrawal. Age 55 can work out pretty well for university tuition purposes if your child was born when you were in your mid 30s or later. So take a look at CPF top ups, such as MediSave Account and Special Account top ups for tax relief, in light of university funding needs. No, the top ups themselves (and interest) cannot be withdrawn at age 55, but "a rising tide can lift all boats" as it were. Funds in excess of the CPF Full Retirement Sum on your 55th birthday will be available for withdrawal for any purpose, including university tuition. Even repaying a CPF Ordinary Account and earning 2.5% is pretty darn good, especially if your children are not too far away from university.

hi. considered topping up OA but the timeline won't match one of them hence looking for alternative. considering other options as well.

 

[BBCWatcher]

If only look at guaranteed alone then you will most probably not like any plan as it is not the way to look at for endowment plan

It's a perfectly reasonable question: what's the insurer guaranteeing? There are government guaranteed (and near guaranteed) alternatives, for example.

 

[winthony]

good idea also.. then perhaps the time frame can be 20 years instead.

20 years is pretty good for planning purposes. it all depends if you are disciplined enough to do your own investment and the necessary.

My advice for people is that, if you are able to generate >4% consistently, there is no need to get any product or find anyone to do it for you. Until and unless you want a fuss free approach, savings/endowment products could be something for you

 

[zzzzzz87]

i'm considering a part in investment, RSP as well as endowment plans since the SSBs are not very attractive at the moment... can't put eggs all in one... can't guarantee my investment and RSP will be >4% consistently.

 

[BBCWatcher]

can't guarantee my investment and RSP will be >4% consistently.

Neither can an insurance company.

 

[zzzzzz87]

Neither can an insurance company.

yeah. that's why diversifying. some insurance companies guaranteed at maturity is lower than premiums paid.

 

[boredboiboi]

yeah. that's why diversifying. some insurance companies guaranteed at maturity is lower than premiums paid.

The 1 recommend is meant for long term. And Capital is 100% guaranteed at year 15 excluding par fund returns. And also it depends if you are going for regular premiums or single premium. Single premium guaranteed at year 10 usually.

 

[moejoseph]

Below is a comparison of some insurers done by an IFA

Most insurers allow you to choose the year of maturity, but best returns will still be to do a Pay-10 premium, and wait for another 15 years (Total 25 years)