The January 2022 federal retiree COLA is on track to be the highest since 2009, standing at 5.7 percent through 10 months of the counting period following an increase in July of 0.5 percentage points in the inflation index used to set that adjustment.

The 2009 COLA was 5.8 percent for those retired under CSRS and 4.8 percent for those retired under FERS and who were eligible for a COLA (under FERS, COLAs generally are not paid to retirees under age 62), due to a provision of law shaving 1 percentage point off the FERS figure when the count exceeds 3 percent—as is now virtually guaranteed to be the case for the 2022 adjustment.


In the years since 2009, the inflation count exceeded 3 percent only once, for the 2012 COLA, while no COLA was paid in January 2016 because the inflation count finished negative.

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.
Note: Social Security COLAs follow the same formula except that a full Social Security COLA is paid even to someone who has drawn benefits for less than a year.

Some Finer Points of Retirement COLAs

FERS and Social Security Take Some Stress Out of Planning to Spend Your TSP, IRAs

TSP Investors Handbook, New 7th Edition