Meet Andy. He’s 30, lives in Perth and has just launched a business designing apps for larger companies. Andy is extremely excited about his new venture and money is already starting to come in, but he’s wary about what comes next.
Andy realises he is going to become wealthier as his business takes off, but – after watching friends in similar situations having to pay high tax bills – he wants to protect his new found wealth while also growing it in the long term.
This is why Andy chose Centuria LifeGoals, the simple, flexible and tax efficient investment solution giving investors the control to grow wealth in the way they want.
But what is Centuria LifeGoals? This innovative strategy makes use of the increasingly popular investment bond structure, which is essentially a combination of a managed fund and a life insurance policy, to give you a say in how you want to invest. The most exciting features of Centuria LifeGoals include:
Most importantly, your Centuria LifeGoals investment can be altered to reflect your financial situation as it evolves, while also delivering optimum tax efficiency. To show you how, let’s go back to Andy’s scenario.
At 30 years old and after his first taste of success, Andy uses Centuria LifeGoals to grow profits from a huge business deal in a tax efficient way.
He takes $25,000 and invests it in a Centuria LifeGoals account with a growth portfolio selected as his underlying investment. As his business continues to generate cash, Andy regularly tops up his Centuria LifeGoals investment with $500 per month in the first year and increases this by 10% per annum, thereby meeting the 125% rule every year.
After 10 years, Andy has contributed a total of $124,620 in investment and the value of his Centuria LifeGoals is now $145,480 after tax and fees. As he has met the 125% rule throughout this investment period, Andy can now withdraw the entire sum without any tax to pay.
Importantly, Andy still had the option to withdraw money before the 10 year point was reached. If the investor withdraws money in year eight (or earlier), all of the earnings on the withdrawal are assessable when it comes to tax. However, for withdrawals in year nine only 2/3 of earnings are assessable and in year 10 only 1/3 of the earnings are assessable.
Andy has been able to fulfil his business dreams in a tax effective manner. For someone who made a lot of money developing and designing bespoke apps, the amount of flexibility and tax efficiency Centuria LifeGoals has given to Andy has been ideal!
Not your investor profile? You don’t have to be like Andy to benefit from Centuria LifeGoals. Everyone’s financial situation is different and Centuria LifeGoals is used for a wide range of financial goals.
To understand just how flexible Centuria LifeGoals can be, we’ve created an innovative new financial calculator (LIFT) to help you decide how to grow your investment by selecting LifeGoals investment options. By simply entering information about your current situation and your financial aspirations, the calculator instantly shows how Centuria LifeGoals could work for your own specific situation.
1. In years 9 & 10 this difference is discounted by one-third and two-thirds respectively.
LifeGoals can be used for a number of investment scenarios. Which investor profile are you?