3.6% COLA for Retirees in 2012

The final inflation figures for the 2011 fiscal year have been released, and the news is good for retirees who are hoping for a Cost of Living Adjustment in January 2012.  The 2012 COLA for military retirees will be 3.6% – a significant increase and most welcome after two years without a COLA.  The 3.6% adjustment will become effective 1 December 2011, and will be reflected in January 2012 retired pay, Survivor Benefit Plan, Veterans Administration, and Social Security payments.

There are two groups of military retirees who will not see the full 3.6% COLA applied to their current payments.  First are retired servicemembers who entered service on or after Aug. 1, 1986 and chose the REDUX retirement plan.  The REDUX plan gave a $30,000 Career Status Bonus at 15 years of service.  In return for the bonus, those servicemembers agreed to accept reduced retired pay and also a reduced COLA.  REDUX retirees’ COLAs are calculated at 1% below the normal COLA rate, so they’ll see a 2.6% COLA.

The second group who will not see the full 3.6% COLA are those servicemembers who retired in 2011.  They will receive a smaller COLA for just this one year, as they already benefited from the active duty pay in January 2011.  All future COLAs will be the same as everyone else.

I know that there are many people who are going to be very, very happy about this.

 

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.

40 Comments on "3.6% COLA for Retirees in 2012"

  1. Richard Mathias | October 27, 2011 at 9:27 am |

    what about disabled veterans ?

  2. Hi Rich,

    Do you receive VA disability compensation as well as military retired pay? If so, then the 3.6% cost of living adjustment will be applied to both.

    Mike

  3. what about CSRS and FERS retired federal employes?

  4. Except TRICARE fees are going up 13%. What happened to capping TRICARE increases to the COLA?

  5. VA comp COLA has not passed or sent to Pres to sign as of Nov 1, 2012,
    REPUB HOUSE IS HOLDING trying to get more in budget cuts.. I expect it to pass by Vets Day…

  6. I retire next month. So from what I'm reading this cola increase will have no affect my checks?

  7. I have heard that the COLA for retired military, Social Security and Dissability is retroactive to Jan 1 2011. Is this true?

  8. Danny Stevens | November 18, 2011 at 1:09 pm |

    I welcome the 3.6% increase to MilRet , VA disb., and Fed, employee pay but I find it disappointing that active military pay will be increased a mere 1.6%. In my small mind and being a dumb retired Marine I do not understand this

    Major USMC (Ret) Mustang

  9. I receive NSC disability,will I get the increase in January?

  10. http://www.medicare.gov/cost/#
    Actually medicare fees, which the standard premium for an individual that made $85,000 or less in 2010 which is when the last COLA adjustment was made is actually decreasing to $99.90. Since that is the last COLA adjustment rate that is the last income figures they are using. For families/married couples it is $170,000 or less.

  11. Does anyone know where to find out how much a retiree will be getting in his retired pay starting Dec. 1, 2011?

  12. Big Deal, a lousy 3.6 percent raise after freezing cola for two years.

  13. what will the medcare increse will be?

  14. i signed up for ss in oct to start recieving in jan i wasw told what my reward is going to be than . do i get the 3.6 raise on jan 1 also?

  15. Willie M Mills | December 6, 2011 at 9:30 am |

    What percentage will the widow's are entitle to? Also will our funds will be rectroactive in jan 20012? I'm a spouse of a 100% disable Veterans.

  16. The 3.6% COLA will be effective Dec 1 and will be reflected in January retired pay, SBP, Social Security, and VA disability compensation checks. But there are two categories of military retirees who won’t receive a 3.6% COLA

    2011 Retirees: Servicemembers who retired during calendar year 2011 will receive a somewhat smaller, partial COLA for this year only, because they already received a January military pay raise (which also raised their 2011 retired pay). Members who retired between Jan. 1, 2011, and Sept. 30, 2011, will receive a partial COLA based on the calendar quarter in which they retired. Jan.-Mar. retirees will receive 3.6%; Apr.-Jun. retirees, 2.4%; and Jul.-Sept. retirees 0.4%. Those who retire after Oct. 1, 2011, will see no COLA this year. Members retired during 2011 will receive full-year COLAs in future years.

    REDUX Retirees: Servicemembers who entered service on or after Aug. 1, 1986 and elected to accept a $30,000 career retention bonus at 15 years of service agreed to accept reduced retired pay and COLAs as a trade-off for the bonus. REDUX retirees’ COLAs are depressed 1% below the normal COLA rate, so they’ll see a 2.6% COLA.

  17. is this retro active to 2009 looking for annsers

  18. So does this mean that on the back pay that "they" owe me for disablility they will add the 2.4% for evry freakin month that i have been waiting? I havent had my foot in the door long and I'm already feeling you guys pain that have been waiting for years. God Bless You All!!! WHen I got my first retirement check, I was like okay I will be getting my disability check soon. mmmmhm!!! Then life insurance came out, then dental insurance came out among othe fees. Its jus me and my spouse, if we had kids, I would be at a J.O.B.

  19. Is the increase for people who get va disability also?

  20. PRAISE THE GOOD LORD FOR TAKING CARE OF US ALL…..

  21. MacGregor Phillips | December 15, 2011 at 4:18 pm |

    Just looked at my RAS for 2012 on DFAS MyPay web site and it does not reflect any pay raise at all in Gross Pay for Feb 2012.. Retired in 1990.

  22. I'm reading about the complaints of the cola increase – I'm happy for whatever I receive since I'm single and my only income is the military so each dollar is a blessing to me. I have no medical bills thank God since all my surgeries are done at the VA and all military related but I still struggle each month with mortgage and life struggle and yes I'm still waiting on disability approval that I requested after my 2nd tour in Iraq. So I'm blessed with the cola and will adjust my lifestyle to accomodate my one check a month

  23. Hey Folks,, We get what we Get, Lets be happy we get anything at all,,AFCM Usn Ret.

  24. How the one's on the white house get there, they need a piss test and fire all !
    Bunch a international players, the Republican Candidate is looking to break the world record to add more flags in his resume as a player.

  25. were you go to find the pay scale, for va. in 2012

  26. Shirley Jenes | December 26, 2011 at 6:56 pm |

    Thank god for what he has done for us. He will supply all our needs. I remenber a song titled that they is a rainbow after the storm, and i think this applies to us also, We all can get down and depressed,and when we put our faith in god he will see us thru. I know he gets credit for our raise and he is over the ones getting it passed

  27. 3.6% adds independence for investment portfolio. I intend to purchase stock with it – I have no idea what I would have done without the Veterans Administration. My family did not pass $1.00 dollar to me in their death. The military was more polite than my family. They did not inform me of either parent’s death. They sent me to a hospital within 3 months of discharge in 1976. I think they were the handicap – I thought the USMC was more polite than my table talk quite frankly. Thanks to the Veteran's that know how to wear the uniform and what side it really is to be on. I am proud of God and his people.

  28. Attention all disabled vets who are receiving disability payments. My 3.6% increase was not for the full amount. I checked with another vet and his increase was short also. Please take your old monthly amount and multiply it by 3.6%. I bet you will be a $1.00+ short also. Is the government purposely shorting each veteran $12.00 per year?

  29. How does the DoD justify us paying taxes on 13 paychecks for 2011, and then a full year's taxes on 12 paychecks in 2012, based on the change for accounting purposes? Are we not getting screwed by paying taxes on one extra paycheck? Or am I missing somethig?

  30. OK, so if I read this right, since I retired 31 May 2011, and I took the Redux, my COLA will be 1.4%, correct?

  31. I get Va disability compensation but have not received a cola increase for 2012. Do you know why?

  32. My husband is 100% VA disabled. He did not get an increase in his January payment and from what he can tell on the ebenefits website his payment for February does not include an increase either. He did get an increase his SSD. Is there a cap on the amount that affects eligibility for COLA? We live in PA if that makes any difference.
    Thanks
    Barbara

  33. When the notice was sent to me about the 3.6% cola for retirees initially they didn't say anything about service members that retired in 2011 would not see
    the 3.6% because of active duty increase in 2011. We got a whopping $4.00
    extra in his paycheck. The 3.6% would have been a nice increase since his
    retirement plus new job paycheck was together a loss of about 300.00 a month
    income, plus the new job had a wage freeze through 2012. I know I shouldn't complain, at least we have a retirement check and a paycheck coming in.

  34. What is meant exactly by saying that people who retired in 2011 "will receive a smaller COLA for just this one year…" I suppose Zero is smaller but I would like to hear something less vague since my check is exactly the same.

  35. I was medicaled out in aug 07 at 60% and then uped to 90% last year. I didn’t see a change in my va check since the cola increased nor has a buddy of mine. Can anyone explain this issue?

  36. does mil retired pay affect social security if taken at age 62?

  37. Will the retirement pay for military and VA disability pay be separated instead of taking out from those who recieve less than 50%

  38. Looking back at my 1099R's…My gross distribution for 2012 DECREASED by 4.5%. Is this a mistake by DFAS or what happened? COLA was 3.6%, but I saw a -4.5%.

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