Grow Your Money with Compounding Interest

Understanding compounding interest is important for planning for retirement. Compounding interest helps your money grow over time, which means that a dollar put in savings today is worth more than a dollar saved later because it has time to build interest and grow. Learn more.

Compounding interest is when your money grows not just on what you put in initially, called principal, but also on the interest it earns over time, leading to bigger savings in the long run. It’s like a snowball rolling downhill—over time, the snowball gets bigger the longer it rolls. 

Here’s what you should know about compounding interest: 

  • Start Saving Early: Even a small amount of savings can grow a lot over time due to compounding interest, so it’s important to start saving early. 
  • Keep Your Money Invested Long-term: The longer your money stays in an interest-bearing investment account, the more it benefits from compounding interest and the more it grows. 
  • Be Patient: Be patient and let compounding interest add money to your account. If you want your account to grow faster, contribute a little each month or whenever you can. 

 See how your money can grow with compounding interest using the Compounding Interest Calculator. 

*Calculations are based on the average market return of 7% and are not a guarantee of return on investment. All investments carry risk. This figure is for informational purposes, only. Talk to a financial professional for more information.

For every qualified hour you work as a caregiver, your contributing SRP employer adds up to $1 to your SRP retirement account. As you work more, your employer contributes to your account more.  

With your money invested in the SRP, you get the benefit of compounding interest adding to your retirement account balance until you are ready to take your money out.  

To estimate how much money you may have in your SRP account when you retire, login to Retirement: My Plan to use the retirement calculator made specifically for caregivers like you.  

Tax Preparation and Planning

See these great resources for tax preparation and retirement planning.

The Child Tax Credit helps families with qualifying children get a tax break. You may be able to claim the credit even if you don’t normally file a tax return. 

The Child and Dependent Care Credit is a tax credit that may help you pay for the care of eligible children and other dependents. 

The American Opportunity Tax Credit (AOTC) is a credit for qualified education expenses paid for an eligible student for the first 4 years of higher education. 

The Lifetime Learning Credit (LLC) is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution. This credit can help pay for undergraduate, graduate and professional degree courses. 

The Washington State Working Families Tax Credit is for individuals and families in Washington state who may be able to receive up to $1,200 back if eligible. 

The Credit for the Elderly or the Disabled helps retired taxpayers on permanent disability to get a tax credit based on qualifying income.

The Medical Expense Deduction applies only to expenses not paid by insurance. Expenses may be covered if you made payments for the medical expense directly or if payment is made on your behalf to the doctor, hospital, or other medical provider.

Washington State ABLE Savings Plan is a flexible and convenient way for people living with disabilities to invest in their quality of life.

The Credit for the Elderly or the Disabled helps retired taxpayers on permanent disability to get a tax credit based on qualifying income.

The Medical Expense Deduction applies only to expenses not paid by insurance. Expenses may be covered if you made payments for the medical expense directly or if payment is made on your behalf to the doctor, hospital, or other medical provider.

Washington State ABLE Savings Plan is a flexible and convenient way for people living with disabilities to invest in their quality of life.

AARP Foundation Tax-Aide provides free tax assistance to anyone, with a focus on taxpayers over age 50 and have low to moderate income.

IRS Free File lets qualified taxpayers prepare and file federal income tax returns online using guided tax preparation software. It’s safe, easy and no cost to you.

The IRS’s Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs offer free basic tax return preparation to qualified individuals.

Please contact a tax preparation professional if you need more assistance.

How much will I have for retirement?

Online retirement calculators are an easy way to see how much money you might have when you retire. All you need to do is enter your financial information into the calculator to see an estimate. The information you enter is anonymous and all estimates are for educational purposes only.

  • AARP’s Retirement Income Calculator can give you a personalized look at what your finances might be like when you retire. This calculator includes many aspects of your retirement planning, such as your personal savings, employer accounts (like your Secure Retirement Plan) and your lifestyle.
  • Retirement: My Plan also has a retirement calculator that you can use to estimate your future Secure Retirement Plan balance. With Retirement: My Plan, you can also name a beneficiary or request a distribution.

More resources to help you plan and save

When you log in to Retirement: My Plan, you will be taken to Milliman’s website to see your SRP information. Your information is always confidential.

Washington’s Retirement Marketplace is a secure website where businesses and individuals can comparison shop state-verified, low-cost retirement savings plans, such as Individual Retirement Accounts (IRA): 

  • Aspire: Aspire is one of the IRA providers found on the Washington Retirement Marketplace. They offer financial planning resources in addition to their Individual Retirement Accounts at affordable rates. Learn more or call Aspire directly at 1-206-939-5615. 
  • FinHabits: FinHabits is one of the IRA providers found on the Washington Retirement Marketplace. FinHabits provides diversified portfolios at affordable rates. Learn more or call FinHabits directly at 1-800-492-1175. 

Resources through Washington’s Retirement Marketplace are available in 5 languages.

Wherever you are in your retirement planning, you can use CFPB’s Consumer Tools to help you get prepared. Resources are available in 8 languages. 

The Consumer Financial Protection Bureau (CFPB) protects consumers from unfair, deceptive, or abusive practices.

  • It can be hard to make a budget yourself. You can also use this budget worksheet you can fill in to have a budget calculated for you. 

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Caregiver Learning Center System Maintenance

June 6 (Thursday) – June 10 (Monday)

You can log in, enroll and take your training in the Caregiver Learning Center during this time. 

If you complete training during the System Maintenance, it will be sent to your employer after June 10. 

Please contact your employer if you have questions about your training requirement, deadline or payment.