Military retirees and annuitants will get a 1.5 percent cost-of-living adjustment in their January 2014 retiree checks.
Each fall the federal government determines the next year’s COLA based on the Consumer Price Index. The CPI is a mixture of several factors including the inflation rate of the reflected in the cost of groceries, housing, medical care, energy and gasoline prices.
While this year’s rate is a lower than last year’s, many retirees may remember that there was no COLA increase in several years before.
Our friends at the Military Officers Association of America point out that there are two retiree groups which will not recieve the full 1.5% COLA:
2013 Retirees: Some servicemembers who retired during calendar year 2013 will receive a somewhat smaller, partial COLA for this year only, because they weren’t in retired status for the full year. Their partial COLAs generally reflect the amount of inflation experienced in the calendar quarters since they retired.
Jan.-Mar. retirees will receive 1.5%; Apr.-Jun. retirees, 0.9%; and Jul.-Sept. retirees 0.4%. Those who retire after Oct. 1, 2013, will see no COLA this year. All members who retired during 2013 will receive full-year COLAs in future years.
REDUX Retirees: Servicemembers who entered service on or after Aug. 1, 1986 and who elected to accept a $30,000 career retention bonus at the 15-years-of-service point agreed to accept reduced retired pay and COLAs as a trade-off for the bonus. REDUX retirees’ COLAs are depressed 1% below the normal COLA rate, so they’ll see a 0.5% COLA this year.
The COLA increase applies to military and federal civilian retired pay and Social Security benefits. VA Disability Compensation and Pension COLAs are decided separately by Congress, but they typically reflect the rates of increase.
NOTE: The Senate passed the bill to provide the COLA for veterans earlier this week. The House is expected to pass the bill in time for veterans to see the 1.5 percent bump in their January checks.