We not only have a very safe pension (from lawmakers who can raise the tax revenue) but it grows with inflation. Retirees who entered military service on or after Aug. 1, 1986 and opted-in for the Career Status Bonus (CSB/Redux retirement plan), have any COLA increases reduced by … Because I worked my last day in 2002 instead of in 2001, I was deemed to be 6.5% more valuable– for the rest of my life. Now will inflation rise above the Fed’s target 2%? The amount of this first "partial COLA" is calculated differently for the Final Pay and High-36 retirement plans. The 2021 COLA (Cost-of-Living Adjustments) increase is 1.3% as announced by the Social Security Administration. 10 Veterans Benefits You May Not Know About, Veterans Employment and Training Service (VETS), Security Clearance Jobs After the Military, Military Spouse Career Advancement Accounts (MyCAA), Monthly Housing Allowance (MHA) for the GI Bill, Veterans ID on Driver’s License or ID Card by State, Parents’ Dependency and Indemnity Compensation (DIC) Tables, Social Security Disability Insurance (SSDI). If you’re eligible to opt in to the Blended Retirement System, that also means you’re unlikely to stay in the military long enough to earn a pension. (Disability retirement dates are set by a different process.) The COLA is determined by the percentage increase, if any, between the average 3rd quarter Consumer Price Index (CPI) of the current year over the average 3rd quarter (CPI) of the prior year. If you would like to find more information about benefits offered by Veteran Affairs, visit the official site for veterans benefits at Veterans Affairs. Instead of starting a lifetime stream of payments at a certain nominal value and watching that value be savaged by decades of inflation, a COLA is intended to keep your hard-earned military pension fighting inflation at the same value of real dollars for the rest of your life. Well, that’s another problem. You should strongly consider opting in before the end of 2018. Veterans who retire during the current calendar year will receive a temporary partial COLA due to already receiving a military pay raise in January. Did your Medicare premiums impact your social security benefits? Note that we also had zero COLAs in 2009, 2010, and 2015. The partial COLA for REDUX plan retirees is based on the High-36, with a further prorated deduction. For now, all you really care to know is that the military pension COLA is based on the CPI-W rate of inflation. The Military Guide To Financial Independence. The 2021 Cost of Living Adjustment (COLA) increase for the 70 million Americans who rely on Social Security, VA disability, military retirement and other government benefits will be 1.3%. For free. U.S. government agencies have not reviewed this information. Let’s take my personal Final Pay example: I retired on 1 June 2002, and I started my terminal leave in late February. The first partial COLA under the Disability retirement plan is the same as for the Final Pay retirement plan. My pension COLAs from 2002-2017 have compounded to nearly 38%. My pension has grown from $2655/month to $3647/month simply to keep up with inflation. Ooh, now it’s going to be nearly 17 years, and approaching the life expectancy of the average male. In the event of a decrease in the CPI, the COLA will not be negative, but will be zero. Those who retired before October 2016 got the full 2017 COLA of 0.3%.