Basic Math/ Basic Truths
The other week at an interesting gathering of fellow retirees in Skokie, I listened to an illuminating presentation by Rich Frankenfeld from TRS. It was a long drive, but well worth it. In his update, Rich covered a variety of areas for concern: the financial condition of TRS, health insurance information, various plans available to all of us in the room, and other “major issues” including the threat and possible outcomes for SB1. The President of the Skokie Organization for Retired Educators (S.O.R.E.) is, of course, Fred Klonsky.
Of note was another review of the changes to Cost of Living Allowances under the new SB1 for Tier 1 retirees and the forced “simple” interest for Tier 2.
While speaking to several of the points in his program, Rich dropped a small piece of information that caught my interest.
“Our eldest recipient of a pension in from TRS is currently 108 years old.”
Spoiler alert (Biss, Nekritz, Madigan, et.al.): Klonsky quickly retorted that he was personally planning to beat that number.
108 years old?
I’ll assume it was a she, but still what an incredible and protracted life-span.
Born in 1906. The year Theodore Roosevelt warns the nation that we face a corporatist elite that would endanger all our freedoms; the year The Jungle is published; and the year of the Windber Strike by 5000 workers in Pennsylvania marching to join with the nascent United Mine Workers.
Started teaching in 1927. A lanky but gifted pilot takes an outrageous gamble to fly solo across the Atlantic and somehow land in Paris, France.
I envision her teaching 40 years while the world struggled to survive economic collapse, bleed profoundly to thwart fascism, endure the pervasive terror of an accumulation of nuclear weapons, Viet Nam…
She retires in 1967.
According to the Chicago Tribune, an average salary for a teacher in 1967 was between $6800 and $7400. By the way, even then the Tribune seemed concerned about the increases in teacher salaries over the last decade.
So, assuming she has her full time in and she has a stipend, let’s figure her 75% of salary for her retirement annuity at $6000 per year.
She earns a Cost of Living Allowance in 1968. And, still alive, she receives that COLA for 47 years! YOU GO,GIRL!
On the other hand, this is an unexpected extension in a life span that actuaries or Senators like Dan Biss would call an unexpected change in assumptions. We all live too long now; therefore, SB1.
But when you actually run the numbers, it seems less onerous than the Senator would have me believe. In fact, her final annuity earnings seem closer to penury than an easy subsistence.
3% Compounded COLA on $6000 over a period of 47 years = $24,071.
3% Simple Interest COLA on $6000 over a period of 47 years = $14,460.