Through five months of the counting period toward the January 2021 federal retiree COLA, the count stands at 0.7 percent, following an increase of 0.2 percent in February in the inflation index used to set the COLA. Those receiving injury compensation under the FECA program meanwhile received an increase of 2.3 percent this month.
The COLA for that program is based on the same inflation index but is calculated on a calendar year basis with the payment made in March, in contrast to the retiree COLA, which is based on a count through the third calendar quarter and is paid in January.
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.
More on COLAs – Federal Cost of Living Adjustments at ask.FEDweek.com
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