Reg Jones Expert's View

For the second year in a row, Social Security recipients and most federal retirees received a cost-of-living adjustment effective with January payments. This year it’s 1.7 percent.

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COLAs for federal retirees depend of several things, including the retirement system they are in. While most CSRS retirees can receive the full COLA regardless of their age, most FERS retirees can only receive a COLA after they reach age 62. However, that limitation doesn’t apply to law enforcement officers, firefighters, air traffic controllers, military reserve technicians who lost their military status due to medical reasons, disability retirees, and survivors.

Although by law FERS retirees usually receive less than the amount their CSRS counterparts get, that isn’t the case this year. Because the increase is under 2 percent, they will be entitled to the full amount. In contrast, last year CSRS retirees received 3.6 percent and eligible FERS retirees received 2.6 percent.

If you are a Social Security beneficiary, you received the full amount of the 2013 COLA in your January annuity payment regardless of whether you were drawing that benefit of all of 2012.

That isn’t true for a federal retirement benefit. A FERS or CSRS COLA is prorated based on the number of months you have been on the annuity roll.

For example, if you retired at the end of November 2012 (or up to December 3, if you were covered by CSRS), you’d be on the annuity roll in December 2012 and eligible for your first full COLA in January 2014. If you retired at the end of December (or up to January 3, if you were covered by CSRS), you’d be on the annuity roll in January and eligible for 11/12 of the COLA in January 2014. On the other hand, if you were on the annuity roll in June 2012, you got one-half of the 2013 COLA in your January annuity payment. If you retired in September 2012, you got one-third, and so on.