Investing for children
and grandchildren

The Centuria LifeGoals solution

Centuria LifeGoals works for investors by using the increasingly popular investment bond structure which is essentially a mixture of a managed fund and a life insurance policy. The most exciting features of Centuria LifeGoals include:

• The investment bond structure has a maximum 30% tax rate less allowable deductions, and you can access your entire Centuria LifeGoals investment with no additional tax to pay if you hold it for 10 years (and meet the 125% rule).
• There’s no initial investment amount limit when establishing your Centuria LifeGoals account and you can start from as little as $500.
• After this, you can invest up to 125% of the previous year’s contributions, allowing you to put away more money each year (if you exceed this the 10 year period simply resets).
• Unlike superannuation, you have the freedom to withdraw money whenever you want, and if you do so before the 10 year mark you will pay tax on the earnings at your marginal tax rate less 30% tax rebate¹.
• You can easily transfer ownership of your account with no tax liabilities.

A Centuria LifeGoals investment gives you real flexibility so you can tax efficiently invest in a way that adapts to your financial situation as it evolves. And, because so many investors want to create future wealth for their kids and grandkids, we’ve specially created the Centuria LifeGoals Child Plan. To understand how this works, let’s go back to the Parker’s scenario.

Case study: How the Centuria LifeGoals Child Plan worked for the Parkers and Olivia

First, Alana and John set up a Centuria LifeGoals Child Plan which is the same process as opening a regular Centuria LifeGoals account, except with an additional section in the investment application.

When setting up a Child Plan, the child it’s intended for has to be below the age of 16 at the time of the application. Ownership will automatically transfer to them by the time they reach the nominated vesting age which can be between 10 and 25 years old. The vesting age can be changed at any time and doesn’t alter the original commencement date of the account.

Alana and John set up a Centuria LifeGoals Child Plan for Olivia at six years old with an initial investment of $10,000 and contribute $200 per month in the first year. They will increase the regular contribution by 25% per annum. Because they are investing for the long term, they chose to invest 50% in the Australian share option and 50% in the international share option. They’re planning to gift Olivia the whole amount when she is 16 years old and set this as her vesting age.

When Olivia reaches her vesting age, the account automatically transfers to her. No tax is incurred by the transfer for either Olivia or her parents and by this point, following regular and increasing contributions (totaling $89,806), the total value of the account is $109,878* after tax and fees.

Centuria LifeGoals Child Plan will have allowed Olivia’s grandparents to create a considerable sum on her behalf and easily transfer it to her. The responsibility of the money will then be hers and at 16 we’re sure she will be optimistic about the options now open to her (although to Alana and John she’ll always be their little dinosaur).