Will Federal Retirees Get A COLA Raise In 2022?
If you’re thinking about retirement plans for the remaining months of 2022, you may be wondering if a Cost-of-Living Adjustment (COLA) is scheduled for Social Security recipients and federal retirees. Based on the inflation rates from 2021, a 5.9% COLA was made available for Civil Service Retirement System (CSRS) pension and a 4.9% COLA for Federal Employees’ Retirement System (FERS) retirees. Federal Educators share more about this update that could augment retirement plans for all federal retirees.
Every Cost-of-Living Adjustment goes into effect on December 1st. The adjustment is made and appears in the January payment on the first business day of the month, which is when the benefit for December is paid. Keep in mind that all FERS and FERS Special COLAs are not activated until age 62, except for disability, survivor benefits, and other special provisions.
To determine the annual COLA, the Bureau of Labor Statistics calculates the change in the Consumer Price Index (CPI) for urban wage earners and clerical workers from the third quarter average of the previous year to the third quarter average for the current year. Currently, the COLA for 2023 is estimated to be between 7.3% and 10.8%. Depending on where the figure officially falls, it could be the highest COLA raise to Social Security benefits since the 1980s. This increase would certainly be welcomed by retirees but does come with caution. Because of this high COLA, the Committee for Responsible Federal Budget has warned that this could lead to the insolvency of the Social Security trust even sooner.
Working with a trusted financial team like Federal Educators can ensure you don’t miss out on your hard-earned benefits. Schedule a complimentary benefit analysis or call our Tampa office at (813) 755-7037 today.
