COLA stands for cost-of-living adjustment. Retired federal employees and those receiving survivor benefits will receive a COLA effective December 1, 2023, which will be reflected in their benefit payable January 2024.
The projected estimates for the 2024 COLA are estimated to be around 2.7%.
The COLA is derived from the Consumer Price Index (CPI) for urban wage earners. The US Department of Labor calculates the change in CPI from the third quarter average of the previous year to the third quarter average for the current year.
CSRS COLA Calculation
CSRS annuitants will receive a 1-to-1 match with the CPI.
FERS COLA Calculation
FERS annuitants will receive what we call a “diet COLA.” If the increase is 2% or less, the COLA is equal to the CPI increase. If the CPI increase is more than 2% but not more than 3%, the COLA is a flat 2%. If the CPI increase is more than 3%, the COLA is 1% less than the CPI increase.
**One thing to note is that unless you are retired under FERS with special provisions or under disability, there will be no COLA until you have reached age 62.
What if This is Your First Retirement Year?
To get the full COLA, a retiree’s annuity or a survivor annuity must have begun no later than December 31, 2022. If not, the increase is prorated under both CSRS and FERS retirement plans. Prorated accounts receive one-twelfth of the increase for each month they receive benefits.
History of COLAs
Reach Out to Us!
If you have additional federal benefit questions, contact our team of CERTIFIED FINANCIAL PLANNER™ (CFP®) and Chartered Federal Employee Benefits Consultants (ChFEBC℠). At PlanWell, we focus on retirement planning for federal employees. Learn more about our process designed for the career federal employee.
Preparing for a federal retirement? Check out our scheduled federal retirement workshops. Sign up for our no-cost federal retirement webinars here! Make sure to plan ahead and reserve your seat for our FERS webinar, held every three weeks. Want to have PlanWell host a federal retirement seminar for your agency? Reach out, and we’ll collaborate with HR to arrange an on-site FERS seminar.
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