At least 90% of wealthy Indian parents want to fund their child’s education overseas, despite the costs involved making up 64% of their required retirement corpus, according to the Hong Kong and Shanghai Banking Corporation (HSBC) report.
Over 58% plan to work even post their retirement to fulfill their aspirations, it says.
Even though a vast majority of affluent Indian parents – nearly 78% - either aspire to send their child overseas to study or already have a child studying in foreign universities, their financial preparedness for the goal is less than satisfactory.
They tend to prioritize their children’s international education over their own retirement, as per the HSBC report.
Over two million Indian students are expected to pursue studies in foreign institutions including the universities by 2025.
“As costs continue to rise, funding is the primary concern for parents – the cost of international schooling for a three or four-year degree program in popular overseas study destinations like the US, and UK can use up to 64% of Indian parents’ retirement savings,” mentioned ‘Quality of life’ global study, which surveyed 1,456 well-to-do Indians.
Around 53% of such well-heeled Indian parents have an education-saving plan in place to finance their children’s overseas studies. As many as 40% of respondents expect their child to take on student loans, while 51% are hopeful that they will secure scholarships, the report said.
However, nearly one-third (27%) said that they would even consider selling their assets to fund their child’s education.
“What contributes significantly to the stress levels of Indian parents is the fact that they struggle to secure the required funding, juggling multiple tasks, such as helping their child select the right course and university. And to top it all ensure that they meet the admission criteria for the desired university,” the study noted.
Top five concerns of affluent individuals globally
Globally, the top five concerns of affluent individuals are the rising cost of living, high inflation, physical health issues, higher healthcare costs, and the inability to save enough for a comfortable retirement.
For Indian respondents, the top financial goals included supporting the family financially (45%), gaining wealth for financial security (41%), investing in properties (40%), education savings for their children (40%), and planning for retirement (38%).
The study also evaluated individuals’ outlook towards financial goals, and health-related risks, including rising healthcare costs and the impact of physical and mental health issues besides a child’s overseas education cost.
Financially sound
In spite of concerns, a majority of Indians polled believed that they were financially fit. Over 60% saw an increase in their total liquid/investable assets while 36% did not see much of a shift, the study found.
F.I.R.E (Financially Independent, Retire Early) might be the mantra of the younger generations, but close to 60% of rich Indians plan to work post-retirement.
At least 40% of them want to transfer assets primarily after their death, 37% plan to transfer a part of their assets during their lifetimes, and the rest on passing, according to the study.
