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Illinois TRS Pension Valuation & Allocation Guide (2026)

Funding Status44%

Credit RatingBBB+

Discount Rate5.10%

Your Illinois TRS pension is backed by the State of Illinois and its full taxing authority. Here is how that changes your true asset allocation.

Disclaimer: This tool is for educational and informational purposes only. It does not constitute financial, investment, or tax advice. Calculations use simplified actuarial models and assumptions that may not reflect your individual circumstances. Consult a qualified financial advisor before making investment decisions.

Personal Information

Current Age

Gender

MaleFemale

Pension

Your own pension(s) — add multiple if you receive income from more than one source (e.g., FERS + military retirement, or dual state pensions).

Monthly Pension Payment ($)

Pension System

Pension has COLA adjustment

Funded ratio: 44% | Credit: BBB+ | Discount rate: 5.10%

Social Security

Monthly SS Benefit ($)

Plan Through Age

Actuarial Life TableChoose Custom Age

Uses SSA actuarial life tables (age 110 terminal)

Spending

Monthly Spending Need ($)

Other Income

Monthly Other Income ($)

Wages, rental income, annuities, etc. Reduces your liquidity buffer.

Assumptions

Liquidity Buffer (months)

Months of spending shortfall held in short-duration assets

Portfolio

Total Investable Portfolio ($)

Target Equity Allocation

Use my own target instead of market-derived allocation

Market-derived target: 50.6%

Present Value of Income Streams

PV of Pension

$252,527

Discount rate: 5.1%

PV of Social Security

$343,548

Discount rate: 4.3%

Life Expectancy

17.3 years

SSA actuarial life tables (2021)

Total Wealth Analysis

$1,096,074

Component	Value	Share
Investable Portfolio	$500,000	45.6%
PV Pension	$252,527	23.0%
PV Social Security	$343,548	31.3%

36-Month Liquidity Buffer

Monthly Income (Pension + SS)

$4,000

Monthly Spending

$5,000

Monthly Shortfall

$1,000

36-month withdrawal buffer: $36,000 ($1,000/mo x 36 months). This is held in high-quality short-duration assets and counts toward your bond allocation.

Portfolio Allocation Recommendation

Target (Total-Wealth Basis)

Based on an equity risk premium* of 4.4% and risk-free rate of 4.3%:

Target equity: 50.6% of total wealth = $554,336
Target bonds: 49.4% of total wealth = $541,738

Bond-equivalents already held: $632,074
(PV Pension + PV SS + liquidity buffer)

Recommendation (Your Portfolio)

Equities: 92.8%

$464,000

Bonds: 7.2%

$36,000

Even at 93% equities in your portfolio, your total wealth equity allocation only reaches 42.3% — short of the 50.6% total-wealth target by $90,336. Your bond-equivalent income streams (pension + SS) make up too large a share of total wealth.

Allocation Summary

Allocation	Equities (%)	Bonds (%)
Recommended Portfolio	92.8%	7.2%
Achieved Total Wealth	42.3%	57.7%
Target Total Wealth	50.6%	49.4%

Key Insight: Your pension and Social Security represent 54%of your total wealth. These income streams act as bonds on your personal balance sheet. This means your investable portfolio should hold a higher equity allocation than conventional age-based rules suggest, because the "bond" portion of your total wealth is already large.

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