Saturday, 17 February 2018

How to Save and Invest for Child's Education !!





Find out how you can accumulate enough funds for your children’s studies when Higher Education costs are shooting up. 

The class of 2018 of the Indian Institute of Management-Ahmadabad will pay Rs.19.5Lakhs for the two-year course. This is 400% higher than what the premier B-school charged in 2007. If the fees  of the two-year management course continues to rise by an average 20% every year, it will cost roughly Rs.95Lakhs in 2025.

Even undergraduate courses have not been spared. The tuition fee for engineering courses in the Indian Institute of Technology (IIT) has been hiked from Rs.90000 to Rs.2Lakhs per annum. This is just the tuition fee--the total cost is much higher. At an average running inflation rate of 10%, a four-year engineering course that costs Rs.8Lakhs today is likely to set you back by Rs.17Lakhs in another eight years’ time. By 2030, the same would cost more than Rs.30Lakhs. If you have not planned well, you could get a rude shock, falling way short of the required corpus when your kid is ready for college. In fact, for engineering and medical aspirants, the costs start even while the student is in high school. Coaching institutes charge anywhere between Rs.80000-Rs.1Lakh a year for preparing the student for the entrance exam.

This sharp spike in fees is a wakeup call for parents saving for the higher education of their children. “Higher education costs have the highest inflation rates in the country. Parents need to realize it is going to be an expensive affair.

As mentioned earlier, the cost of higher education is shooting up. Many parents who started late or chose the wrong investment vehicles may find themselves woefully short of the target. If you face a shortfall, don’t be tempted to dip into your retirement corpus to fill the gap. This is a mistake. Your retirement should be given priority over your kids’ education Instead you should take an education loan with the child as a co-borrower.

As mentioned earlier, the cost of higher education is shooting up. Many parents who started late or chose the wrong investment vehicles may find themselves woefully short of the target. If you face a shortfall, don’t be tempted to dip into your retirement corpus to fill the gap. This is a mistake. Your retirement should be given priority over your kids’ education Instead you should take an education loan with the child as a co-borrower.

The entire plan can crash. The only way to guard against this is by taking adequate Life Insurance. A term plan does not cost too much. For a 30-35 year old person, a cover of Rs.1Crore will cost barely Rs.10000-Rs.12000 per year. That is too small a price for something that safeguards your biggest dream.

For More Details Visit: LifeLine Insurance & Financial Expert

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