The 2013 Cost of Living Adjustment (COLA) for all military retirement pay, Survivor Benefit Plan (SBP) annuities, Social Security benefits, and Veterans Affairs disability and survivor benefits has been announced. The adjustment will provide a 1.7% increase in those payments, effective 1 December 2012. Since those benefits are paid in arrears, the change will first be seen in the January 2013 payments which are scheduled to be direct deposited on 31 December 2012.
Two groups of military retirees won’t receive a 1.7% COLA:
2012 Retirees: Servicemembers who retired during 2012 will receive a reduced COLA for this year only, because they weren’t in retired status for the full year. Their reduced COLAs generally reflect the amount of inflation experienced in the calendar quarters since they retired. Jan.-Mar. retirees will receive 1.7%; Apr.-Jun. retirees, 1.0%; and Jul.-Sept. retirees 0.2%. Those who retire after Oct. 1, 2012, will see no COLA this year. All members who retired during 2012 will receive full-year COLAs in future years.
REDUX Retirees: Servicemembers who entered service on or after Aug. 1, 1986 AND who elected to accept a $30,000 Career Retention Bonus (CRB) at 15 years of service will receive a 0.7% COLA this year. In the agreement under which these servicemembers accepted the CRB, they also agreed to accept reduced retired pay and COLAs as a trade-off for the bonus. REDUX retirees’ COLAs are 1% below the normal COLA rate.
I am glad that there will be some COLA adjustments this year, even if it isn’t as much as many people would like. Get out your calculators!