Inheritance planning
Make your inheritance work harder than you think
Nearly half of inheritors spend their entire windfall in year one. Use this calculator to understand the long-term value of the wealth you've received — and how to make thoughtful decisions with it.
$5.4T
Wealth transfer underway in Australia
44%
Of inheritors spend all of it in year one
$500,000 invested at 8% over 25 years
$3,424,000
Invested
$250,000
Mortgage / debt
$175,000
Inheritance received
$
Allocate your inheritance
Cashflow impact
Current pre-tax income
$
Annual salary / income before tax
Debt interest rate
Interest rate on mortgage / debt being paid off
Marginal tax rate Auto
Based on income (incl. Medicare levy)
Investment projection
Annual return
Historical ~8% for a diversified portfolio
Time horizon
Invest now, draw income from age ~60
Annual income drawn from investment
Franking credit uplift
40% Aus shares · 4% div yield · 30% franking rate
Reinvest mortgage savings — redirect freed-up repayments back into the portfolio each year instead of spending them
No drawdown
With drawdown
What the research says
Behavioural insight
Parkinson's Law of money — mortgage savings are invisible because they're usually spent
When a mortgage or debt is paid off, the repayments stop — but the money doesn't automatically go anywhere useful. Lifestyle creep fills the gap. Spending quietly rises to meet the newly available income: a nicer car, more dining out, a holiday that stretches a little further. This is Parkinson's Law in action: expenditure rises to meet income. The benefit of eliminating $175,000 of debt at 6% is $10,500 a year — but most households won't notice it disappearing.
Investment drawdowns work differently. Choosing to receive income from a portfolio is an active, visible decision — you see the transfer, you account for it, and the portfolio balance reminds you of the trade-off. That friction encourages more deliberate use of the money. The same dollar amount feels — and behaves — differently depending on whether it arrives passively or intentionally.
A good financial plan captures both: a deliberate strategy to redirect mortgage savings before lifestyle creep absorbs them, alongside a structured drawdown from investments that keeps wealth working over the long term.
Investment drawdowns work differently. Choosing to receive income from a portfolio is an active, visible decision — you see the transfer, you account for it, and the portfolio balance reminds you of the trade-off. That friction encourages more deliberate use of the money. The same dollar amount feels — and behaves — differently depending on whether it arrives passively or intentionally.
A good financial plan captures both: a deliberate strategy to redirect mortgage savings before lifestyle creep absorbs them, alongside a structured drawdown from investments that keeps wealth working over the long term.
About franking credits
How the franking credit uplift is calculated
Australian companies pay corporate tax at 30% before distributing dividends. When those dividends reach you as an investor, they carry an imputation (franking) credit for the tax already paid — meaning you're not taxed twice on the same income.
This calculator assumes 40% of the portfolio is allocated to Australian shares (the income sleeve), generating a 4% dividend yield, fully franked at the 30% corporate rate. The grossed-up dividend — cash received plus the franking credit — is then assessed at your marginal tax rate, with the credit offsetting what you'd otherwise owe.
The net uplift shown is the additional effective return you retain compared to receiving the same income without franking. At a 34.5% marginal rate this is typically around +0.45% per year on the portfolio — a meaningful compounding advantage over a long time horizon. Lower marginal rates increase the benefit; higher rates reduce it (though the credit is never lost, only reduced in net value).
This calculator assumes 40% of the portfolio is allocated to Australian shares (the income sleeve), generating a 4% dividend yield, fully franked at the 30% corporate rate. The grossed-up dividend — cash received plus the franking credit — is then assessed at your marginal tax rate, with the credit offsetting what you'd otherwise owe.
The net uplift shown is the additional effective return you retain compared to receiving the same income without franking. At a 34.5% marginal rate this is typically around +0.45% per year on the portfolio — a meaningful compounding advantage over a long time horizon. Lower marginal rates increase the benefit; higher rates reduce it (though the credit is never lost, only reduced in net value).
General Advice Disclaimer
This calculator demonstrates information that is general in nature. It does not take into account your objectives, financial situation or needs. You need to consider your financial situation and needs before making any decisions based on this information.
Any information or calculations provided are for illustrative purposes only and should not be relied upon as financial advice. For personalised advice tailored to your specific circumstances, please contact Bold Wealth to arrange a consultation with one of our qualified financial advisers.