Services · Caloundra & the Sunshine Coast

Annuities and investment bonds advice in Caloundra and on the Sunshine Coast

An annuity turns a lump sum into regular payments for a set term or for life. An investment bond is an investment held outside super, with tax paid inside the bond. Simon explains how they affect tax and the Age Pension, and whether they suit your plan. We work with people in Caloundra, Mooloolaba and across the Sunshine Coast.

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Simon Pederson, M.Fin, B.Bus (FP), Founder and Lead Retirement Planner, over 15 years helping people plan for retirement

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What is an annuity and how does it work?

An annuity is a product you buy from a life insurance company or friendly society, using super or other savings. You pay a lump sum, and in return you get regular payments for a set number of years or for the rest of your life. Annuities that pay for life are a type of lifetime income stream. [1]

Payment amount: with a conventional annuity, the payment is set when you buy it. It can rise each year by a fixed percentage or with inflation. With an investment-linked annuity, the amount goes up and down with the chosen investments. [1]
If you die: payments usually stop, unless you chose a reversionary beneficiary (such as your partner) or a minimum payment period when you bought it. [1]
Trade-offs: you give up access to the lump sum, the payments may be lower than the returns from investing the lump sum yourself, and the terms are rarely changeable after purchase. [1]

Simon lives in Caloundra. We work with people in Caloundra, Mooloolaba and across the Sunshine Coast.

How do lifetime income streams affect the Age Pension?

Services Australia has special rules for lifetime income streams bought on or after 1 July 2019, which include lifetime annuities. [2]

Assets test: if the product meets the Capital Access Schedule, at least 60% of the purchase price generally counts from assessment day. This drops to at least 30% from threshold day, which is either your 84th birthday or a minimum of 5 years from assessment day. [2]
Income test: once payments start, 60% of the gross payments count as income. [2]
Before payments start: the rules differ depending on whether you bought it with super or savings. Some products with a higher surrender value or death benefit are assessed at more than 60% and 30%. [2]

Simon looks at how a lifetime product would fit with your Age Pension, your account-based pension and super and your other investments.

What is an investment bond?

An investment bond (also called an insurance bond) is an investment held through a life insurance company or friendly society, outside super. Tax on the earnings is paid within the bond, and when you take money out affects your tax. [3]

The 10-year period: bonus amounts you take out in the first 8 years are fully assessable, two-thirds are assessable in year 9 and one-third in year 10. After the 10th year, they aren’t included in your assessable income. If you include a bonus amount in your tax return, you get a tax offset equal to 30% of that amount. [3]
Adding money: if you put in more than 25% above the previous year’s amount, the 10-year period restarts from that year. [3]
Who receives it: some bonds let you nominate who receives the proceeds, so check the product’s PDS. Simon can look at how a bond fits with your estate planning and tax in retirement.

What is a funeral bond?

A funeral bond is a managed investment set aside for funeral costs. The money can only be released after death, to your estate or the funeral director, to pay for funeral costs. [4]

Age Pension: as at 1 July 2026, up to 2 bonds with a total under the Funeral Bond Allowable Limit of $16,250 aren’t counted in the assets test, as long as you don’t also have prepaid funeral expenses. The limit is reviewed on 1 July each year. [4]
Couples: a jointly owned bond counts as one bond, and the limit isn’t doubled. [4]
Assigned bonds: a bond assigned to a funeral director for a fully prepaid funeral, under a contract, isn’t counted. [4]

How does Simon help you decide?

These products suit some people and not others. Simon looks at your income needs, Age Pension, tax, health and family wishes together, and compares annuities and bonds with other options before recommending anything. You can check Simon on the Financial Advisers Register on Moneysmart. [5]

“Simon has the ability to explain complex financial concepts easy to understand, and he is very approachable.”
Robyn, Jan 2026Selected reviews. Individual experiences vary.

See Pricing, Our engagement process and our Path to Prosperity approach. Starting to draw an income? See transition to retirement and retirement income.

Common questions about annuities and investment bonds

Is an annuity right for me?

It depends on your income needs, your other assets, your health and how you feel about market movements. An annuity can pay you a regular income, but you give up access to the lump sum and the terms are hard to change later. Simon compares it with other options, such as an account-based pension, before recommending anything.

How are lifetime annuities treated for the Age Pension?

For lifetime income streams bought on or after 1 July 2019 that meet the Capital Access Schedule, Services Australia generally counts at least 60% of the purchase price in the assets test, dropping to at least 30% from threshold day. 60% of the payments count in the income test.

How are investment bond withdrawals taxed?

Bonus amounts you take out after the 10th year of the bond aren’t included in your assessable income, so they’re generally tax-free (limits and conditions apply). Amounts taken out in the first 10 years are fully or partly assessable, with a 30% tax offset on the amount included, and putting in more than 25% above the previous year’s amount restarts the 10-year period.

How much can I put in a funeral bond without it counting for the Age Pension?

As at 1 July 2026, the Funeral Bond Allowable Limit is $16,250. Up to 2 bonds under that limit aren’t counted in the assets test, as long as you don’t also have prepaid funeral expenses. A jointly owned bond counts as one bond, so the limit isn’t doubled.

How do your advice fees work?

No sales pressure. We quote a fixed dollar fee for your advice before any work starts, based on its complexity and scope. Ongoing fees and any other payments, such as life insurance commissions, are set out in our FSG.

How do I check that an adviser is registered?

Search the Financial Advisers Register on Moneysmart. It lists advisers who give personal advice on investments, superannuation and life insurance, and the licensee that authorises them.

Wondering whether an annuity or bond fits your plan?

Start with a 30-minute Fit Check with Simon, Founder and Lead Retirement Planner, by phone or video call.