Federal and military retirees will receive a 1.5 percent cost-of-living adjustment starting in January, according to government figures released Wednesday morning by the Bureau of Labor Statistics. The COLA will also apply to tens of millions of recipients of Social Security and veterans benefits.
The planned increase, based on Consumer Price Index data, will rank among the smallest in years. This year, retirees received a 1.7 percent boost. The adjustment is “welcome news for countless Americans who rely on the increase to keep up with the rising price of food, housing, transportation and medical care,” Joseph Beaudoin, president of the National Active and Retired Federal Employees Association, said in a statement.
But with premiums for employees and retirees in the Federal Employees Health Benefits Program set to rise by an average of 4.4 percent next year, the announcement is also a reminder that the method of calculating the COLA is “out of sync” with the reality faced by retirees who spend more on medical care than the U.S. population as a whole, Beaudoin added.
“We need a formula that doesn’t force these Americans to take one step forward, then two steps back,” he said.