Grandchild education fund

 

both are not guaranteed anyway If it is endowment or annuity kind it is guaranteed just happen ppl in this forum say the return too little. They most likely does not have one in reality to see the benefits. So they chant IBKR VWRA almost every time. It is like the entire investment world is this simple equation. They are young and naive is my view.

8% unlikely to be endowment, and is probably ILP.

My post first word is If. I am replying to OP post on guaranteed or non-guaranted topic. I never talk anything about the magic number 8%

setup a joint account between your parents and your kids in CDP, brokerage or IBKR. fund those accounts with your parents money, and put the money in DBS / UOB / VWRA. don't touch those accounts, and help them print a statement once a year for your parents to see and nod in satisfaction.

Prioritise liquidity whatever the option.

Give you the money and be sincere about it.

The key here is probably the mindset - of greed or to more safeguard the sum. There are of course higher return non-guaranteed options to consider but being a gift from parents for the grandkids, the last thing I’ll want is to take a risk or be greedy with the sum. Endowments / Annuity may sound boring but the capital is protected, moreover time is on your side. Just my 0.5 cents.

It's probably an endowment plan. You should not give any advice unless you have the details. Throwing money into index funds is not the safest option out there.

How bout d05 for legacy

I don’t think it can be an endowment plan if the FA waved the number 8% around. That’s the max allowed in the benefit illustrations for equities fund so likely ILP. If it’s endowment with par fund, they can only use 4 or 4.25% max in the benefits illustration.

Investment plans typically have a guaranteed return portion and a non guaranteed portion. Example you might have a 2.5% guaranteed and 5.5% non guaranteed. Might want to ask the FA more question like what is the projected return at different levels. Honestly a more conservative fund like this is not the worst idea for an education fund. Yes you can potentially get more if you self manage with Vwra etc but remember that for an education fund you DIE DIE need the money in 18-21 years to fund your kids education. Usually these sort of education or endowment funds take that into account and reduce your risk substantially when your withdrawal window nears. Of course u can do this yourself if you know how to but that’s work on your end.

E.g year 2000 you need the funds for education but is US dot com bust so how? VWRA marketed as world has major top holdings US sure kena also. Then how? Some readers say must plan ahead like this year must sell some put in safe instrument to counter such scenario. Then sell some is how much? Sell too much lose returns. Sell too little kena next year cham. So yes it is definitely more work.

8% dont anyhow pls. Annuity max 3%

Are you able to really dig out the thinking process of grandparents? That’ll be the most helpful but most of the time they rarely explicitly say out even if ask them outright. Usually when grandparents and parents come across the same data (features/benefits) of the same plan, the thinking angles of grandparents vs parents can be quite different, due different life experiences and “enlightenment” when they are personally reach that life stage.  What are the roles (those that a pure holding in brokerage can’t do) that they would like suggested to play and last long in their simple planning structure for the grandchild?  If only that plan can play those roles in the way most suitable to your structure, then use ilp and get early. Else, don’t use. You’ll need to hear from someone who has benefitted both from pure equities and such plans to give you views which are more objective.

You’ll need to hear from someone who has benefitted both from pure equities and such plans to give you views which are more objective.

Even if you provide the OP doubt your experience and called you names like boomer etc. But since I feel this forum need a good representation of all ages. I posted despite some reader call me names and insinuate swear words in abbreviation assume as boomer I dunno. The more they swear the more it reflect on their parents upbringing or maybe parents is same as OP then ok make sense

Your parents buy already but are still in 14 days free look period? Or haven’t bought yet?

Your parents get sold by emotions, not data and numbers. You tell them risk and diversifications and index fund, they still won't change their mind, because all they want is "I want to leave something behind to my grandchildren". The only way to "fight" back is by playing emotions card too. -- why let an outsider earn the commission when you can give 100% to grandchildren? Something like that.

Tell them to top up you kid's cpf, sure safe.

Anything that promises 8% returns needs to be scrutinized Even temasek and gic gives like 5-6% annualized returns They might as well close shop and just put all their money into this plan