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Plan and invest now: give your future self choices

Promoted by Centuria Capital Limited

As we come to the end of the financial year, you might be looking forward to receiving a tax refund. Next year, many Australians are set to pay less tax, thanks to recent budget changes.

By investing a small amount now, and starting a monthly investment plan you could be buying your future self more options.

No matter what stage of life you are at, there are always important life events – and associated costs – coming up. You might be looking down the line at education costs for your children considering when you would like to retire, and how to afford to do so. Perhaps you are planning the trip of a lifetime when you stop working. You may be even thinking about how to leave money to your children or grandchildren in a definite and easy way.

For all these plans, we know that the earlier we start investing the better.

What are your options?

Investment bonds are an ideal way to achieve such long term financial goals. They offer an excellent, set-and-forget long-term investment plan and their tax-effective structure makes them a great way of achieving your financial goals.

Tax-effective, no reporting

Investment bonds are an investment with a life insured and a beneficiary, that operates like a tax-paid managed fund, with an underlying portfolio of investments. The maximum amount of tax paid within an investment bond is the company tax rate of 30%, which makes them especially attractive for people on more than $80,000 per annum. No personal tax is paid if the funds are not accessed for 10 years, providing a further incentive to keep your savings intact. And so long as you stick to the rules, no tax reporting is required at all. If you withdraw before 10 years you simply pay the difference between the 30% tax rate and your marginal rate, making you no worse off than investing directly into a managed fund.

Other tax benefits may also apply – you can see the full range of investment options here as well as the benefits and conditions which are outlined in the PDS.

You can also access our Investment returns calculator, which helps you to work out how much you will need to invest to reach a specific goal. Then there is a dedicated Cost of Education calculator to find out how much you will need to pay for your children’s education to help you structure your investment.

Low starting amount – lots of flexibility

You can start a Centuria Investment Bond with a one-off investment of just $500 and make regular contributions of up to 125% of the previous year’s contribution, or from as little as $100 per month to maximise the compounding benefits of regular investing. Centuria Investment Bonds also offer a range of investment options so you can match the assets in the fund to your own investor profile. You can also switch between options without cost or capital gains tax penalty.

Investment bonds are also flexible in that your funds can be accessed at any time, albeit with some potential tax consequences depending on when you withdraw the funds.  Their simplicity and tax-effective nature also make them ideal vehicles for estate planning, tax planning, as an adjunct to superannuation.

If you would like to understand more about the benefits of investment bonds, including their use in estate planning as well as long-term investing, please contact Centuria on 1300 505 050.

Plan and invest now: give your future self choices
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Neil - I retired about a year ago and now I've got less income than I planned for. Can I sue my financial planner?....
Joe - Agree with Terry Dwyer. The really nasty part is the way it will hit self funded retirees (through their SMSF in many cases) who have direct shares.......
John - Not sure loss of 30% of income is something I just let go. Options I will be doing is investing overseas, local and international REITs and seeing if.......
Dr Terry Dwyer, Dwye... - I am amazed by these comments. The effects will be subtle but pervasive. It will have a huge effect on superannuitants in pension mode as with low.......