blessedheart
New member
My bank in Austria is offering an "ETF as insurance product" which appears to be a retirement-fund scheme (i.e. either lump sum payment or monthly pension after a certain date) with included insurance for invalidity.
Anyhow, it has a running cost of 8% for 5 years which drops to 2% after 5 years, but monthly premium can only be doubled from the initially set amount. The projection is that over a hypothetical runtime of 30 years, 90.3% of the premium will be invested and 9.7% should be some cost or another. The appeal appears to be that this ~10% includes a 4% insurance tax which is the only tax that will be asked for this in Austria. The driving funds for this product can be chosen (and choices include MSCI all world at 0.2% transaction cost) and split amongst multiple ETFs (or actively managed funds if one was so inclined).
My question is now: for a runtime of ca 30 years, is this competitive against the same ETF which will incur taxes of 27.5% on capital gains at the time of selling?
Thank you!
Anyhow, it has a running cost of 8% for 5 years which drops to 2% after 5 years, but monthly premium can only be doubled from the initially set amount. The projection is that over a hypothetical runtime of 30 years, 90.3% of the premium will be invested and 9.7% should be some cost or another. The appeal appears to be that this ~10% includes a 4% insurance tax which is the only tax that will be asked for this in Austria. The driving funds for this product can be chosen (and choices include MSCI all world at 0.2% transaction cost) and split amongst multiple ETFs (or actively managed funds if one was so inclined).
My question is now: for a runtime of ca 30 years, is this competitive against the same ETF which will incur taxes of 27.5% on capital gains at the time of selling?
Thank you!