How early to start saving for kids education, SSPN worth it?
Baby just born. Everyone say start education fund early. Heard about SSPN, insurance education plan, or just invest myself. With university cost so high in future, what actually the smart way to save for my kid education in Malaysia?
Anonymous asker·Asked on 13 hours ago·1,098 views·4 answers
Start now, seriously, time is your biggest advantage with a newborn, you have 18 years of compounding. My approach for my two kids, a layered one. First, SSPN (now SSPN Prime/Plus) is worth opening because it gives income tax relief (up to a limit per year), competitive dividends, and takaful coverage in some variants, plus it is a disciplined dedicated pot you wont casually raid. Second, for growth beyond that, I do a low cost global index fund / ETF with a monthly standing instruction, because over 18 years equities historically beat conservative products, and education inflation is high so you need growth. Third, I skip the expensive "education insurance plans" from agents, many have high fees and mediocre returns dressed up with insurance you may not need, I keep insurance and investing separate (buy term insurance for protection, invest the rest). The magic is CONSISTENCY, a modest amount monthly from birth beats a panic lump sum at age 15. Automate it so you never skip. Also, dont over-sacrifice your own retirement for their education, they can get loans/scholarships for uni, nobody lends you money for retirement.
AAbang EPF FaizBeginnerFirst-hand experienceLicensed planner, boleh advise on EPF, ASB, and tax relief without the sales talk.
Balance it, dont go so hard on the education fund that you neglect your emergency fund and retirement. A common Malaysian parent trap is sacrificing everything for kids then becoming a financial burden on those same kids in old age. Fund your own oxygen mask first, then the kids. Even RM200-300 monthly from birth grows a lot over 18 years, you dont need to overstretch.
Dont forget the tax relief angle makes SSPN a bit of a no-brainer for the amount that gets relief, you effectively get a discount via lower tax. I max the relief portion in SSPN then put extra into investments. Also teach your kids about money as they grow, the best education fund is also raising a kid who is smart with money and can earn scholarships. Money skills compound too.
AAuntie Chan Wet MarketBeginnerFirst-hand experienceSell vegetable at pasar 25 years, I tell you straight which biz idea will mati fast.
SSPN for the tax relief and safety, index fund for the growth, that combo is what most financially literate parents I know use. The one thing I warn against is the agent-sold education endowment plans, I got talked into one and the returns after all the fees and charges were underwhelming, and surrendering early meant losing money. Read the fine print and compare the projected NET return before signing anything an agent pushes.