 |
| The Miracle of Compounding |
February Means 3% Increased COLA for Tier One - Thanks to IRTA
Simple interest is a percentage of money (a.k.a. interest) earned on an original (or principle) amount of money. For example, if you invest $100 at 10% simple interest per year, you will receive $10 at the end of the year on your original $100 investment. And, with simple interest, you would receive the $10 each next year, and on and on. In short, you would earn $10 per year for every year you maintained your original investment.
Compound interest, on the other hand, provides you the percentage on the original amount (principle) plus any earlier earned interest. In other words, you would earn a return (in this case, 10%) on the original investment plus the interest earned in the year previously. This difference is as significant as E = MC²!
See the chart below for an example:
Original $100 After
|
Simple Interest
|
Compound Interest
|
1 YEAR
|
$110
|
$110
|
2 YEARS
|
$120
|
$121
|
3 YEARS
|
$130
|
$133
|
4 YEARS
|
$140
|
$146
|
5 YEARS
|
$150
|
$161
|
10 YEARS
|
$200
|
$259
|
20 YEARS
|
$300
|
$672
|
30 YEARS
|
$400
|
$1,744
|
40 YEARS
|
$500
|
$4,526
|
50 YEARS
|
$600
|
$11,739
|
A Message from IRTA Today, February 1st.
“Hi, I’m Mike Schmidt chair of the state IRTA membership committee. I’m here to remind you that today is February 1ST and we all know what the means. Yes, it is just 24 days until my next birthday… oh, no, no, no.
I mean that today is the day that TRS deposits to us our next pension payment. More importantly, this February pension payment is the first one of 2019 to include our annual 3% raise, if you’re over the age of 60, of course.
Speaking on behalf of the IRTA, I’d like to remind you that it was the leadership of this organization that saved your yearly 3% cola when the state legislature voted to restrict it several years ago. It was the IRTA lawsuit in the case, Heaton vs. Quinn that ultimately guaranteed our retirement benefits.
Without the efforts of the IRTA we would be poorer and our futures less assured. So, as a reminder, if you haven’t yet paid your 2019 IRTA annual dues, now is a great time to do so.
With that in mind, remember that you can save $10.00 a year by switching over to dues deduct by going to the new and improved IRTA website.
And when you run into retired school colleagues, ask them to join with you in the IRTA if they haven’t done so already. After all, we belong to the only state-wide organization solely dedicated to protecting the retirement benefits promised to us by the state. With those guaranteed benefits I know that your next birthday will be a happy as mine will be.
Thank you for your membership.”
Mike Schmidt,
IRTA Membership Committee, Chair
No comments:
Post a Comment