Proposed changes to superannuation may have a significant impact on the retirement savings plans for many Australians and they need to consider alternative tax-effective strategies.”
These are the words of Neil Rogan, General Manager of the Investment Bond Division for Centuria Capital (Centuria), who today highlighted that the federal election result is likely to mean minimal change to the plight of Australians affected by the proposed changes to super.
“It seems clear that there is going to be some change to superannuation and investors should review their tax effective investment options.
“Recently, we have seen increased inquiries for information on investment bonds, which isn’t surprising. Investment bonds are one of the most tax-effective investment solutions for investors looking for flexibility and simplicity,” he explained.
Investment bonds are a tax paid investment structure offering investors a range of managed funds of different asset classes and to suit a variety of risk profiles. Tax is paid at the company rate of 30% within the bond structure.
“There’s no limit to the amount that can be invested in an investment bond, so for investors likely to hit the proposed $500k lifetime non-concessional cap, it is an option worth considering.
“Investment bonds offer flexibility as well. Investors can withdraw their funds at any time, but if they stay invested for 10 years, earnings are 100% tax free. Also, additional contributions of up to 125% of the previous year’s contribution can be made each year,” Mr Rogan said.
“Of course, every investor’s situation is different so it’s important to look carefully and assess the pros and cons of all investment alternatives, including investment bonds.
“But for Australians who may be affected by possible changes to super, or those who would like to contribute more than the maximum tax-effective contribution each year, investment bonds should be on their consideration list ,” Mr Rogan said.
