The future of retirement security for federal employees is uncertain. The current system is unsustainable, and the government is facing pressure to make changes. One of the biggest questions is what will happen to the cost-of-living adjustments (COLAs) for federal retirees. COLAs are designed to help retirees keep up with inflation, but they have been frozen in recent years. If this continues, the value of federal retirement benefits will erode over time.
The nonpartisan Congressional Budget Office (CBO) recently released a report that projected the impact of freezing COLAs on federal retirees. The report found that retirees who are 65 years old today would lose an average of $10,000 in benefits over the next 20 years. Retirees who are 55 years old today would lose an average of $20,000 in benefits over the next 20 years. These losses would be significant, and they would make it difficult for retirees to maintain their standard of living.
What Will the COLA Be For Federal Retirees in 2025?
The cost-of-living adjustment (COLA) for federal retirees in 2025 will depend on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter of 2024. The COLA is calculated by comparing the average CPI-W for the third quarter of the current year to the average CPI-W for the third quarter of the previous year. If the CPI-W has increased, the COLA will be equal to the percentage increase. If the CPI-W has decreased, the COLA will be 0%.
The CPI-W has been increasing steadily in recent years, so it is likely that the COLA for federal retirees in 2025 will be positive. However, the exact amount of the COLA will not be known until the CPI-W data for the third quarter of 2024 is released.
People Also Ask
When will the COLA for federal retirees in 2025 be announced?
The COLA for federal retirees in 2025 will be announced in October 2024.
How is the COLA for federal retirees calculated?
The COLA for federal retirees is calculated by comparing the average CPI-W for the third quarter of the current year to the average CPI-W for the third quarter of the previous year. If the CPI-W has increased, the COLA will be equal to the percentage increase. If the CPI-W has decreased, the COLA will be 0%.
What is the maximum COLA that federal retirees can receive?
The maximum COLA that federal retirees can receive is 1.7%.
