Unlimited tax-effective super has ended: Centuria


Australians will increasingly turn to investment bonds, amid the government legislating new super concessional contribution limits, according to property and investment bond manager, Centuria.
Centuria's investment bonds general manager, Neil Rogan said additional contributions to super may not be an investor's best option when planning for retirement, as the Government finalised super legislation reforms that would be effective from 1 July 2017.
"Those savers likely to exceed the $1.6 million superannuation balance cap should review their options and consider alternatives to help supplement their superannuation," he said.
"For Australians who will be affected by the new rules next year, and for those who want to contribute more than the maximum tax-effective contribution, investment bonds can be a very robust option worthy of consideration."
Since the superannuation reforms were first proposed in the 2016 Federal Budget, Rogan said Centuria had received increased levels of enquiries from investors wanting information on bonds.
Now that the reforms were confirmed, he expected bond enquires to continue.
He said bonds were are a simple, flexible way for investors to supplement their super.
There was no limit on the investment amount, and investors could access their funds at any time. However, after 10 years there was no personal tax to pay on withdrawals, he said.
"Another advantage is that bonds allow for additional contributions of up to 125 per cent of the previous year's contribution each year," he said.
Recommended for you
A financial advice firm has been penalised $11 million in the Federal Court for providing ‘cookie cutter advice’ to its clients and breaching conflicted remuneration rules.
Insignia Financial has experienced total quarterly net outflows of $1.8 billion as a result of client rebalancing, while its multi-asset flows halved from the prior quarter.
Prime Financial is looking to shed its “sleeping giant” reputation with larger M&A transactions going forward, having agreed to acquire research firm Lincoln Indicators.
An affiliate of Pinnacle Investment Management has expanded its reach with a London office as the fund manager seeks to grow its overseas distribution into the UK and Europe.