I want to invest for a better future, not just my own.

Our Sustainable investment option has an ethical overlay
and aims to support Environmental, Social, and Governance (ESG) issues

Strong financial performance should not be at the cost of the environment. Read about our responsible investment philosophy here:

Their situation

Melissa is in her mid-50s and works in a high-paying, corporate job. She’s in a happy 2nd marriage, and lives with her two kids, along with her new husband and his two kids from a previous relationship.

Her father recently passed away and left her a large inheritance, which meant she could pay off debts and put money into Super.

There’s a limit to how much Melissa can put into super each year, so she’s seeking an alternative option to invest the $450,000 that’s left over.

She sees this new wealth as an opportunity to do good in the world and wants to invest in options that align with her values and will make a difference in the world.

Retirement is still a little way off, but she wants the flexibility to switch to a low-risk investment strategy as she gets closer to retirement.

The money will be used to create an income in retirement, so Melissa wants to minimise the tax she pays on any returns.

When she passes, she wants any money to go direct to her children without them having to pay tax on it. She doesn’t want her step-kids to contest the money for her children.

Why an Investment Bond was a good strategy

For Melissa, our investment bond ticked the boxes with our responsible investment option that did not come at the expense of growth and could assist in meeting her other goals too.

• A 10 Year Investment Bond meant her money was earmarked for access in retirement.
• She could put in an initial $250,000 into the Foresters Financial Investment Bond. Plus, could make additional contributions of surplus cash to her Investment Bond (subject to the 125% Contribution Rule).
• Income earned through the fund didn’t count towards her tax return because it’s paid within the fund, provided it was taken out after 10 years.
• Investment Bonds are a tax-effective investment as tax is paid within the fund at 30% (less than her current tax rate).
• Melissa can access her money if she needs to, but because the goal is retirement, she’s happy to keep it out of reach for 10 years.
• Melissa can nominate her children as the beneficiaries without the fear of it being contested by her husband (or his kids) as it sits outside her estate.
• When she’s ready to retire, Melissa can set it up as a tax-free income stream that doesn’t count towards her tax return.

Outcome

Melissa feels good about being able to put in a large sum of money upfront and that her investment would be invested for good.

Being able to make the most of her inheritance and ensure it goes to her kids when she passes without any hassle makes her happy. When it comes time to distribute it to her children, they won’t have to pay tax on it.