Saving for Education Fees
Once the decision has been made to make the
financial sacrifices necessary to provide your child with the
best you can afford, the first piece of advice to any parent
is to plan early.
Offshore, tax-efficient savings plans can
help spread the cost of education over many years if taken
out at least 5 years
before the child is due to start schooling. Even modest contributions
on a regular basis over a number of years can make school
fees more affordable. For example, several of our client’s
premium payments are aided by contributions made by grandparents
willing to help their offspring.
It is important at outset
to appreciate the funding of the plan as a long-term commitment.
If you are able to perceive
your savings plan as the financial underpinning to that
commitment, then an offshore regular premium contract should
hold no
fears for you but do remember, as with all long term savings
plans,
there are penalties if you cancel the planned savings earlier
than the term of the contract.
A Case History
Below is a worked example of the costs of a 3 yr college
education and the way in which a monthly savings program
can build
adequate provision for school fees funding in future years.
Please click on the link below to read the key features
brochure from Generali International.
Vision for Education
After accepting a position
overseas with a generous package that included local education
support up to age 18 for his child, our client, a 29 year old
man, decided that he should plan for his 3-year old daughter’s
university education.
Our client decides that his daughter is likely to study a 3-year
course following her eighteenth birthday. Today the costs
are estimated at US$24,000 per annum, but once inflation, at
5%
per annum, is taken into account over the 18-year period,
the total
cost is likely to be US$149,800.
Therefore, we were able to calculate that with an investment
return of just 5% per annum, the monthly contribution would
need to be US$584. However, should the investment growth
be greater,
say 8%, there would be a surplus of US$57,587. If the growth
were 11% there would be a surplus of US$136,057.
Our client will be able to take advantage of the facility
of penalty-free partial encashment during the course of his
daughter’s
university career. A feature such as this is an essential
part of a successful education fees schemes as it allows
flexible
withdrawals whilst the rest of your investment retains the
benefit of its tax-efficient growth environment.
The client also decided to opt for protection of a guaranteed
death benefit of US$180,000 so that if anything happen to
him there would still be funds for his daughter’s further
education.
Start planning for your child’s future today
If you would like to discuss your own financial commitment
to your child’s education and how best to plan for it, we
can help with personalized quotations and all the facts and
figures from a wide range of schools, university’s and
colleges worldwide.
Please contact us
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