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.  

Child Tax Credit 

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. 

Child and Dependent Care Credit 

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

American Opportunity Tax Credit 

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. 

Lifetime Learning Credit 

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. 

Washington State Working Families Tax Credit 

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. 

Tax Credit for the Elderly or the Disabled

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

Medical Expense Deductions

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

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

Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC) helps low- to moderate-income workers and families get a tax break. If you qualify, you can use the credit to reduce the taxes you owe – and maybe increase your refund.

Saver’s Credit

The Saver’s Credit helps you take a tax credit for making eligible contributions to your IRA or employer-sponsored retirement plan.

Tax preparation help

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

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.

IRS: Free tax preparation by volunteers

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.

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. 

• Social Security Administration’s “Understanding the Benefits” Publication 
• SSA.Gov Retirement Planning Tools 
• The Consumer Financial Protection Bureau’s (CFPB) Social Security Calculator 

• Learn more about the basics of budgeting on this helpful online resource called “Making a Budget,” from the Federal Trade Commission, whose mission is to protect consumers. 

• 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.