Expert's View

Image: SergioVas/

Over the last two weeks, we’ve considered three questions that are essential when you sit down to figure out what your annuity will be when you retire: What is your high-3? What is basic pay? Why is your high-3 important? Then we put those answers to work by showing you how to compute your own annuity. This time let’s explain how cost-of-living increases will affect your annuity.

Any increase in your annuity will be based on annual changes in the consumer price index (CPI-W). And the rules governing the amount of that adjustment are different for CSRS and FERS retirees.


CSRS retirees receive COLAs regardless of the age at which they retire. FERS retirees only begin receiving them when they reach age 62, but with one exception. That exception is for special category employees, such as law enforcement officers, firefighters and air traffic controllers, disability retirees, and certain military reserve technicians who lost their military status due to medical reasons.

Another difference is in the COLA amount that CSRS and FERS retirees will receive. CSRS retirees will receive the full amount of the increase. On the other hand, when the CPI-W increases by 3 percent of more in any year, FERS-covered retirees and survivors will get 1 percent less than that. If the CPI/W goes up by 2 to 3 percent, the adjustment will be 2 percent. If it increases by less than 2 percent, the adjustment will be the same as the CPI-W.

It’s worth noting that if the CPI-W goes negative – as it did in 2010 and 2016 – your annuity wouldn’t be reduced. You just wouldn’t receive a COLA.

Read more on how COLAs apply to federal annuity payments at