The same full calculated COLA is paid on Social Security benefits, with no prorating for those retired less than a year. Image: Maxx-Studio/Shutterstock.com
A federal retirement COLA will be paid in January of 2.8 percent for those retired under CSRS and 2 percent for those retired under FERS who are eligible for COLAs.
The announcement follows completion of the count toward the adjustment with figures through September in the inflation index used to set the COLA.
Those retired under CSRS or CSRS Offset receive a full COLA regardless of their age. However, those retired under FERS don’t receive COLAs until age 62 unless they retired on disability or under the special retirement provisions for law enforcement officers, firefighters or air traffic controllers.
In addition, in situations such as this one in which the count falls between 2 and 3 percent, the payout to those eligible under FERS is a flat 2 percent (if the count is above 3 percent, the FERS COLA is 1 percentage point less).
“Inflation impacts these FERS retirees the same way as all other retirees, yet they are forced to accept a diet COLA,” the NARFE organization said, calling on Congress to enact long-proposed legislation to remove the capping provision.
“This COLA also does not adequately compensate for the sharp increase in the enrollee share of health insurance premiums affecting the federal community, which will rise by an average of 12.3% next year for federal annuitants, following a 13.5% increase for 2025. This comes on top of rising prices for many other goods and services,” it added.
Under both systems, the payable COLA is prorated for those who have been on the retirement rolls for less than 12 months.
Social Security benefits also will increase by 2.8 percent. That’s primarily of interest to FERS retirees, for whom Social Security is a basic part of the retirement benefit, but also of interest to CSRS Offset retirees, who have Social Security coverage as part of their benefit.
Also, some “pure” CSRS retirees qualify for Social Security through from military service or earnings covered under that system before, after—and in some cases from outside earnings during—their CSRS working years.
Social Security COLAs are not prorated for recent retirees.
COLAs kick in Dec 1
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.
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