Retirement & Financial Planning Report

Image: Tero Vesalainen/

With the January 2021 COLA payout for retirees now set, at 1.3 percent, some employees eligible for retirement apparently are thinking of retiring soon, hoping to capture it—rather than stick around for the pay raise for active employees, which likely will be only 1 percent.

However, COLAs are reduced by a twelfth for each month that a person was not on the retirement roll. Thus, even by retiring soon, someone who is now still working would get only a small portion of the upcoming COLA.


Under FERS, a person is on the retirement roll in the month after the month of retirement, regardless of what date in a month he or she retired. Under CSRS, a person is on the retirement roll during the month of retirement if he or she retires within the first three days of the month; otherwise, that person is on the roll the next month.

That means that to get the full amount in January, someone who retired under CSRS would need to have retired no later than December 3, 2019. Someone who retired under FERS, and who is otherwise eligible for a COLA would need to have retired no later than November 30, 2019.

Social Security benefits, however, are increased by the full COLA regardless of how long the person has been drawing those benefits. The same 1.3 percent COLA will be paid in that program.

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.

Supplement Paid to FERS Retirees Until Hitting 62

Social Security Figures Increase with COLA Adjustment

January Retirement COLA Set: 1.3 Percent

2021 FEHB, FEDVIP Rates Posted; Average FEHB Premiums up 4.9 Percent

FERS Retirement Guide 2022