The following are questions submitted by a Federal Times readers about retirement, Cost of Living Adjustments, and other issues facing the federal workforce. They are answered by Reg Jones, a charter member of the senior executive service and a Federal Times columnist since 1995.
Question: If I retire 31 December 2022, is the COLA of 7.7% applied to my annuity in January 2023? Do I not get a COLA for the first year I am retired, regardless of when I retire since COLA is from October of the prior year to December of the current year? I am 67 years old. If I go another year and retire 31 December 2023, will I receive a COLA starting with my first annuity in January 2024?
Reg’s Response: If you retire on December 31, 2022, you won’t receive the 2023 COLA. Instead, you’ll be entitled to the 2024 COLA, which will be included in your January 2024 annuity payment. If you retire in December 2023, you’ll receive your first COLA in January 2025.
Question: Hi Reg - Ultimately I am trying to figure out the best month for me to retire in. his year looks to be a great year for the FERS COLA calculation due to it is a high inflation year. It looks that since I did not already retire in 2022 I will not receive that. Okay, so when is the cut-off month/day in a calendar year to receive the COLA increase? From your note it would appear that Nov. is not a good month.
Reg’s Response: According to OPM, “Cost-of-living adjustments are effective on December 1st of the year in which an annuitant becomes eligible. The adjustment appears in the annuity check on the first business day in January.” So, for example, you’d have to be on the annuity roll in November 2022 to receive your first COLA in January 2024.
Question: I am a federal retiree under the FERS system, retired since October 2017. I will be 62 on 4 December 2022. I read the FERS cola is determined in December and is received 1 January 2023. Will I miss it by 4 days and not receive a COLA until 1 January 2024, or will I receive one on 1 January 2023?
Reg’s Response: You would be entitled to the full COLA increase, which would begin with your January 2023 annuity payment.
Question: I retired in June 2017 at my MRA of 56. I turn 62 on December 10th this year. I haven’t had a COLA since I retired as I wasn’t 62 yet. Will I receive the 7.7% FERS COLA in January? Will it be prorated? I called OPM but the representative was unsure if I would get the COLA.
Reg’s Response: Yes, you will. Regular FERS retirees, like you, are entitled to receive the first full COLA after they reach age 62.
Question: I plan on retiring in December. I current receive an annuity as I retired from the federal government 25 years ago. I went back to work for the federal government in 2005 and have continued receiving my annuity and it is reducing my salary dollar for dollar. When I retire the end of December 2022 my annuity will be redetermined using my high three years. Will the COLA be applied to this in January 2023 as I have never stopped receiving an annuity?
Reg’s Response: Yes, you will receive the annual cost-of-living adjustment in your January annuity payment. However, because you are retiring at the end of December, that January 1 COLA will be applied to your current annuity not the annuity you will be receiving after it is redetermined.
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Reg Jones is the resident expert on retirement and the federal government at Federal Times. From 1979 until 1995, he served as an assistant director of the U.S. Office of Personnel Management handling recruiting and examining, white and blue collar pay, retirement, insurance and other issues. Opinions expressed are his own.