Will Federal Retirees get a COLA in 2016?

The numbers are in, and so far, it’s not looking good for federal retirees in 2016.

FedSmith determined that as of the most recently available data in May it appears as though retired federal workers will not receive a cost-of-living adjustment (COLA) next year.

The publication crunched and evaluated the mind-numbing calculation, derived from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) index, which is calculated by the Bureau of Labor Statistics.

You can see their analysis and report about the COLA findings on their website.

FedSmith’s report is a tad wonky, but if you are comfortable with statistics, it will provide you with an extensive overview of how the COLA annuity for federal retirees is calculated and how they came to their determination regarding next year’s COLA.

The COLA adjustment for retirees has been a little anemic in recent years. Last year, the COLA for the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) was only 1.7 percent.

Since December 2013, the COLA increase for both retirement systems has hovered between a tenth of a percent and less than two percent. It has not exceeded two percent since then, according to data posted on the U.S. Office of Personnel Management website.

There was no COLA increase for federal retirees in 2010 and 2011, according to FedSmith. However, federal retirees vested in the CSRS received a 3.6 percent COLA increase in 2012.

We’ll keep you posted on COLA changes, and when new data becomes available.

We also urge you to contact one of our federal benefits specialists for a free consultation. There are a multitude of factors that you need to consider when you retire, especially the windfall, or trickle, you may get in additional retirement income due to COLA.

Unfortunately, COLA will always be entirely out of your control. But you can help overcome bad COLA years with a smart retirement investment strategy.