Pension math. You're entitled to your own opinion, not your own facts.
Why I quit Twitter. Its anonymous toxicity.
My art is on Instagram @klonskyart
I dropped my Twitter account a couple months ago. I hated the platform even though it was addictive. Although I could find useful information, it was a lot of awful debate in the style of you-are-no-you-are-am-not.
A friend sent me a screen snap yesterday from Twitter because my name was mentioned.
This was posted anonymously by someone with the Twitter handle, Citizen vs The Machine. He has 730 followers.
That kind of misses the mark for being a Twitter star. But still.
So, yup. I’m still complaining about inflation.
I’m guessing so are you.
Only the rich are not complaining about paying $7 for a dozen eggs and rents rising at a record pace.
Dollar Store is where millions are food shopping because they can’t afford fresh vegetables.
And who are these Illinois teacher pensioners who retired in 2010 and are now $50K ahead?
It’s a fantasy.
In 2010, the average Illinois teacher pension was $40K. In 2022, the average Illinois teacher pension is $50K.
What is the difference between a pension increase that is 3% simple and 3% compounded?
Compounded is like if you get a raise at work it is a percentage based on your last salary, not the one you were hired at. That’s the way raises work for everyone.
Simple would be a percentage based on your first year’s pension. Even after 20 years.
Nobody gets pay increases that way.
Except Illinois teacher pensions once were simple 3% increases.
That is, every year our pension would increase by the same amount as in our first year of retirement. That changed in 1989 because of the growing concern about the level of past inflation.
Back in those days inflation was crazy. In 1974 it was 12%. In 1979 it was 13%.
In the early 80s I was getting six and seven percent raises as a teacher. Compounded by the way.
Over the past ten years a bargained 3% is what is common.
In 1989 Illinois legislators passed a law to compound the annual three percent growth.
It didn’t catch us up, but it was better.
Of course the legislators forgot to include a way to pay for it. We paid our share. They never paid their share. Hence the $150 billion dollar pension liability.
Social Security, which public school teachers normally do not receive, doesn’t compound. Instead they make yearly adjustments to the retirement benefit based on the CPI.
That doesn’t happen with our pension.
So, what about the years when inflation was low? Didn’t those of us on teacher pensions make out like bandits?
Over the past 20 years the average increase in the CPI has been 2.5%.
I guess I should be thankful for the half a percent.