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Plan for your children's future without jeopardizing your own retirement.
Education planning is forecasting the hyper-inflated future cost of higher education and structuring a dedicated portfolio to fund it when your child turns 18.
Education inflation outpaces standard inflation significantly (often 10-12% annually). Without early planning, parents are forced to liquidate retirement funds or take on crippling education loans.
Parents, or soon-to-be parents, who want to fully or partially fund their children's university costs.
Find the current cost of a 4-year degree (domestic or international).
Inflate that cost by 10% annually for the number of years until the child turns 18.
Ensure your own retirement savings are on track before funding education.
Opt for Equity Mutual Funds over rigid "Child Insurance Plans".
Start a dedicated SIP in the child's or parent's name.
Move the funds from equity to debt when the child turns 15.
Why you must secure your retirement before your child's education.
Why 6% general inflation doesn't apply to university fees.
Why traditional child plans often fail to beat inflation.
The pros and cons of the government-backed scheme for a girl child.
Why taking an education loan might be smarter than liquidating investments (tax benefits under 80E).
Factoring in currency depreciation against the USD/GBP.
* Scenarios are illustrative and rely on assumed market conditions.
Liquidate Retirement: Graduates debt-free, but parent faces severe financial insecurity at age 60.
Take Education Loan: Child graduates with debt, but parent's retirement is secure. Interest is tax-deductible.
Sukanya Samriddhi Yojana - a government-backed savings scheme for the parents of girl children.
Tax deduction available on the interest paid toward an education loan.
The process of gradually moving investments from high-risk to low-risk assets as a deadline approaches.