Looking into where you want to send your kids to school in the coming years? Got a shock at the costs of private school fees?
Sending your child to private school in Melbourne or Sydney is more expensive than Perth or Adelaide. In Sydney, school fees can get over $450,000 for 13 years of education. The question of school fees, and how private school fees can be affordable is often a topic which we discuss in detail with our families.
Positive steps taken now can secure a financially beneficial future for your children. Planning early is key, as it allows you a long timeframe to achieve your financial goals.
At Endorphin Wealth, we are not scared of a challenge and making the private school dream a reality!
What is an Education Bond?
We often use an Education Bond to harvest the power of time and compounding interest to combat school fees.
An Education Bond is an investment bucket, which can be dedicated to educating the children (or grandchildren). Often, a bond is started with a small investment. Your Advisor will then calculate the amount needed to be added to the account each month to enable all school fees to be funded from the bucket.
What makes an education bond even more special is:
- The ability to withdraw from the bond after 10 years with tax concessions.
- Capped tax rates within the bond (could potentially lower than your marginal tax rate)
- When education receipts are provided, you can get special education tax benefits
Is it Appropriate to you?
Not all structures are appropriate to everyone. Therefore, is very important to make decisions based on your current situation. A Financial Advisor can help you:
- Determine the initial deposit required
- Calculate the monthly contributions to the bucket
- Nominate beneficiaries of the fund
- Illustrate the rising cost of education, and how the investment will perform to fund fees
- Determine the level of risk you are willing to take
- Construct a tailored investment portfolio suited to your tolerances and preferences
- Depict how the education bucket will form one element of your overall portfolio.
A small investment now, combined with regular contributions can help you cross school fees off your monthly budget in the future. It is very important to reach out to an experienced Financial Advisor to determine if this is appropriate to you.
If you would like to discuss rising education costs and your plans for your kids, please reach out to the team for an obligation free discussion on 03 9190 8964 or advice@endorphinwealth.com.au
