SGT Jones Minimum/Maximum
Using thecalculatorsite.com starting at zero we can see the result of SGT Jones receiving minimum payments into ADF Super (adjusted to monthly) vs extra interest generated maximising annual concessional contributions. To do this we are making a few assumptions:
- ATO Indexes contributions by $2500 every 2nd or 3rd year in line with CPI (we will use 3% annually, not perfect, it’s impossible to know what years will include a $2500 increase)
- SGT Jones works 19 years before accessing their ADF Super
- SGT Jones chosen ADF Super investment strategy has less than 1 negative year per 6, averaging 10% return PA after fees
Note:
- Allowances including field pay also accrue a 16.4% match for ADF Super which means SGT Jones may need to adjust their salary sacrifice contributions for the last few pay runs to prevent going over $32500. To do this, they would check contributions by logging into CSC and reducing payments with Smart
- SGT Jones will arrive after 01 July, so there will be a portion of unused allowance that could also be backdated/used to boost their initial or end of first year balance
You can play with thecalculatorsite.com for your own circumstances, anticipated starting ADF contributions, your time till 60, benefit of adding early, extra regular or periodic concessional or non-concessional contributions.
Paying for Childcare with pre-tax $
Depending on your childcare provider you can use Smart to pay for some or all your childcare fees reducing your total annual income further and saving you tax on the payments. Savings you could then put towards yours or your child’s future.
Note: Other childcare subsidies and government initiatives are available but they change regularly, vary by state and your earnings. Because I cannot cover all of these my advice is to engage with childcare providers within a few kilometres of your future home location. Find them on Google Maps, check their reviews and discuss it with them directly for the most up to date relevant to location advice. Also see defence.family-programs-services/support-children/childcare for more information.