Core Concept
Funding Stack
Planning Horizon
5-20 Years
Goal
Funded Education
Education planning is about aligning funding, timeline, and risk control to ensure your child's education is fully funded when the time comes - regardless of market conditions.
Education planning is the process of systematically building funds to meet your child's education costs at specific future dates. Unlike other financial goals, education has a fixed timeline - university starts regardless of market conditions.
Funding
Accumulate sufficient funds
Timeline
Match funds to milestones
Risk Control
Protect against disruption
Key Insight: Time horizon determines strategy. The more time you have, the more options are available - and the smoother the contribution journey.
Understanding when costs occur helps you plan contributions accordingly.
Today
Planning starts
Primary
Age 7-12
Lower costs
Secondary
Age 13-16
Moderate costs
Pre-U / Poly
Age 17-19
Building up
University
Age 19-23+
Peak costs
Primary
Secondary
Pre-U
University
Overseas
Costs spike significantly at tertiary level - plan contributions early to smooth the impact.
Before choosing products or strategies, clarify these key inputs.
Where might your child study?
Local university vs overseas institution
Time horizon
How many years until tertiary education?
Funding split
Parents vs child contribution vs grandparents
Cashflow comfort
How much can you commit monthly?
Smoother contributions
More time = smaller monthly amounts needed
Less reliance on market timing
Dollar-cost averaging smooths volatility
More strategy options
Longer horizon allows growth-oriented approach
Time to recover
Market dips early on have time to recover
Short horizon increases risk of shortfall - less time to recover from market downturns or contribution gaps.
Save before your child needs the money. You earn returns on your savings over time.
Take education loans when your child needs funds. You pay interest on debt.
Multiple funding sources create resilience. Understand each layer's strengths and limitations.
Monthly Savings Plan
The foundation - committed, regular contributions
Investment Portfolio
Long-term growth potential, flexible contributions
Endowment / Education Savings Plan
Structured commitment, predictable maturity
CPF Usage for Education
Available for local institutions (rules apply)
Family Support / Grandparents
Helpful but uncertain - don't rely solely on this
Scholarships / Bursaries
Competitive and uncertain - a bonus, not a plan
Parents' Protection (Life/CI/DI)
Ensures the plan continues even if parents cannot
Key principle: Stack certain layers first, then add uncertain layers as bonuses - not foundations.
Cash reserve for near-term or flexible needs.
✓ Highly flexible
✓ No lock-in
✗ Lower growth potential
Long-term growth for distant goals.
✓ Growth potential
✓ Adjustable contributions
✗ Market volatility
Structured savings with maturity aligned to needs.
✓ Disciplined saving
✓ Predictable maturity
✗ Less flexible
Ensures continuity if income is disrupted.
✓ Plan continuation
✓ Peace of mind
✗ Additional premium
The bucket model helps you balance liquidity, stability, and growth.
Near-term fees, emergency buffer
Lower volatility assets
Long-term growth assets
Income & health continuity
Principle: As your child approaches tertiary age, shift from the Growth Bucket to the Stability and Liquidity Buckets to protect the funds you've built.
As the goal approaches, reduce investment risk to protect accumulated funds.
Far from goal (10+ years)
More growth exposure acceptable - time to recover from volatility
Mid-horizon (5-10 years)
Balanced approach - begin shifting to stability
Near goal (<5 years)
Focus on stability and liquidity - protect what you've built
Risk Awareness
Education costs rise faster than general inflation.
Manage: Include growth assets to outpace inflation
Bad market years near withdrawal date hurt most.
Manage: De-risk as goal approaches
Fees are due regardless of asset performance.
Manage: Maintain a liquidity buffer
Committing too much strains current cashflow.
Manage: Balance with other goals
Parents' income disruption stops contributions.
Manage: Ensure adequate life/CI/DI cover
Plans change (overseas vs local, different course).
Manage: Maintain flexibility in funding mix
| Criteria | Savings Account | Fixed Deposit | Endowment Plan | Investment Portfolio |
|---|---|---|---|---|
| Flexibility | ●●●●● | ●●●●● | ●●●●● | ●●●●● |
| Risk Level | Very Low | Low | Low-Med | Med-High |
| Commitment | None | Fixed term | Multi-year | Flexible |
| Short Horizon (<5 yrs) | ✓✓✓ | ✓✓ | ✓ | ✗ |
| Long Horizon (10+ yrs) | ✓ | ✓ | ✓✓ | ✓✓✓ |
| Adjustable Contributions | ✓✓✓ | ✓✓ | ✗ | ✓✓✓ |
Yes → Focus on Liquidity
Prioritise savings accounts and short-term FDs. Avoid growth assets.
No → Continue to next question
More options available with longer horizon.
Yes → Balanced Growth with Glidepath
Use investment portfolio for growth, de-risk gradually as goal approaches. Consider endowments for structured savings.
Yes → Consider Endowments
Structured plans enforce discipline and align maturity with education needs.
Uncertain → Stay Flexible
Use flexible investment portfolios with adjustable contributions.
Don't forget: Protect the plan
Ensure parents have adequate life, CI, and disability income coverage so the education plan continues even if income is disrupted.
Estimate how much you need to save for your child's overseas education. Explore costs by country and institution type.
Calculator estimates are for planning purposes only. Actual costs vary by institution, course, and living expenses.
Structured planning helps you balance certainty, growth potential, and a smooth funding timeline as your child approaches tertiary education.
Planning outcomes depend on individual circumstances and market conditions. No guarantees on returns.
Education planning is about building certainty for your child's future - matching the right funding sources to the right timeline, so the money is ready when they need it.