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Myth buster: Accessing your investment before 10 years....



Generation Life LifeBuilder and ChildBuilder investment bonds provide flexibility, control and access at any time. You can access and withdraw all or part of your investment as and when you need it, providing you with liquidity and flexibility to handle any of life’s unexpected moments.

Unlike superannuation where restrictions apply to accessing funds before retirement, your funds aren’t locked away and you can access them regardless of your age. You decide when to access your investment with no maximum limit on how much you take out, which is ideal if you are looking to fund an early retirement, meet an unexpected expense or make a major purchase. You can even set up a regular income stream arrangement if you want to regularly access funds.

Easily transfer your investment

You can also transfer a LifeBuilder investment to another person as a gift, normally without personal tax or capital gains tax implications, while a ChildBuilder investment bond has been designed to automatically transfer to a child at a nominated vesting age.

Tax treatment of investment bond withdrawals

Investment bonds are tax paid investments, meaning that when earnings are received we pay tax at a rate of up to 30% (however this can be significantly lower depending on the investment option you select). If your marginal tax rate is higher than 30%, this makes investment bonds a great tax effective long term investment.  

If you invest in the bond for at least 10 years, your growth on the entire investment, including additional contributions, will be tax paid, and withdrawals after the 10th anniversary will be free of any personal tax in your hands. Also, you will not attract any capital gains tax on a withdrawal or when switching between investment options.

If a withdrawal from a LifeBuilder or ChildBuilder is made (partial or full) before 10 years however, the investor will generally need to include a portion of the earnings generated by the investment bond as part of their tax assessable income for that year. The taxable earnings component of a withdrawal will depend on how long the investment has been held.

As a reference, withdrawal proceeds include a capital component and an investment earnings component. The capital component is not tax assessable.

What about FuneralBonds?

It’s important to note, FuneralBonds can only be accessed on the death of the investor to fund funeral expenses with proceeds paid either to the investor’s estate or, if assigned to a funeral director as part of a pre-paid funeral arrangement. The 10-year rule does not apply to FuneralBonds.

Find out more

Find out more about how a Generation Life investment bond can help you reach your investment goals.