With FERS Annuity Indexed for Inflation, Fed Retirees Faring Better
Snippet of Article: "The FERS cost-of-living-adjustment (COLA) is adjusted based on the change in the Consumer Price Index (CPI) from the third quarter of one year to the third quarter of the next. Social Security announces the COLA amount in mid-October, and it is not out of the realm of possibility that the CPI could be up 9% from where it was at the end of September in 2021. The FERS COLA trails the CPI by 1% in years when inflation is 3% or higher, so FERS retirees are likely to get a COLA of 8% or more. The Social Security COLA fully tracks the CPI. FERS retirees will have three major sources of income: 1) their FERS annuity; 2) Social Security; and 3) the Thrift Savings plan. Two of these three sources are adjusted for inflation. ..."
Source: www.fedweek.com