Following a 0.5 percentage point increase in the inflation index used to compute the COLA in April, the COLA count stands at 6% through seven months of the counting period for the January 2023 federal retirement cost of living adjustment.
Unless inflation changes direction throughout the rest of the measuring period, the count is on track to surpass the 5.9% rise received in January for those retiring under CSRS and 4.9% for those retired under FERS who are eligible for COLAs (generally not until reaching age 62).
That was the most significant increase since the 8.7% paid in 1982 when the FERS system existed.
COLAs go into effect on December 1 of each year and are applied to annuity payments the following month. COLAs for persons who have been retired for less than a year are prorated according to their retirement date. If you retire in January, your first adjustment will be for 11/12ths of the COLA amount in January of the following year. It will be 10/12ths if you retire in February, and so on. COLAs in the future will be for the whole amount.
COLA According to the Consumer Price Index
The COLA is calculated using the average change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI/W) average from one year to the next. Benefits are frozen but not lowered if the inflation rate is negative. Also, the beginning point for the following COLA count remains the same in that circumstance.
Note: COLAs for Social Security follow the same methodology, except a full Social Security COLA. Even if you’ve been receiving benefits for less than a year, you’ll get a COLA.
Contact Information:
Email: [email protected]
Phone: 6122163911
Bio:
Mickey Elfenbein specializes in working with Federal Employees relative to their retirement benefit plans, FEGLI, TSP, Social Security and Medicare, issues and solutions. Mr. Elfenbein’s mission is to help federal employees to understand their benefits, and to maximize their financial retirements while minimizing risk. Many of the federal benefit programs in place are complicated to understand and go through numerous revisions. It is Mr. Elfenbein’s job to be an expert on the various programs and to stay on top of changes.
Mickey enjoys in providing an individualized and complimentary retirement analysis for federal employees.
He has over 30 years of senior level experience in a variety of public and private enterprises, understands the needs of federal employees, and has expertise built on many years of high-level experience.
