New Year Brings New Finances

In addition to the raise, the arrival of the new year brings several changes in the financial pictures of federal employees and retirees, some due to legislative action and some due to normal adjustments in benefit levels tied to inflation. Retirees will be getting their annual cost-of-living adjustments with their January checks (or direct deposits, for those who get their payments that way). The COLA for those retired under the CSRS annuity system will be 4.1 percent. FERS retirees get the 3.1 percent adjustment on their Social Security benefits, as well (some CSRS retirees also get Social Security benefits through employment outside the government) while they will get 2 percent on the civil service portion of their annuities, assuming they are eligible for COLAs (generally FERS does not pay COLAs under age 62). Those who retired in calendar year 2005 should note that COLAs are pro-rated according to the month in which their annuities started.