The count toward the January 2022 federal retirement COLA stands at 1.4 percent, following an increase in February of 0.6 percentage points in the index used to set that adjustment.
Beneficiaries in the Federal Employees Compensation Act program meanwhile will see a 1.5 percent COLA in their benefit payments in April, the result of an inflation adjustment in that program that uses the same inflation measure used for retiree COLAs, but a different calculation and payout cycle.
Cost-of-living-adjustments (COLAs) are effective on December 1 of each year and are applied to the annuity payments made the following month. COLAs for those retired less than one year are prorated according to the date on which they retired. If you retire in January, your first adjustment will be made in January of the following year and will be for 11/12ths of the COLA amount. If you retire in February it will be 10/12ths, and so forth. Future COLAs will be for the full amount.
COLA Based on Consumer Price Index
The COLA is based on the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI/W) average of the third calendar quarter of one year to the next. If the inflation count finishes negative, benefits are frozen but not reduced. Also, in that situation the starting point for the next COLA count remains the same.
Read more on COLAs – Federal Cost of Living Adjustments at ask.FEDweek.com