COL Robert Schlegel, USA (Ret), Legislative Affairs Chair
Be
Ready for a Lower COLA in 2024
By: Kevin Lilley,
Lilley serves as MOAA’s digital content manager.
(From
the MOAA Newsletter, dated April 05, 2023) Version Abridge)
The
2024 cost-of-living adjustment (COLA) for military retirees, Social Security
recipients, disabled veterans, and others receiving various federal benefits
won’t be set until October, but a quick check of the trend lines show a
significant gap between this year’s figures and last year’s.
A
short primer: The annual COLA calculations stem from the Consumer Price Index
for Urban Wage Earners and Clerical Workers (CPI-W), an inflation measurement
released monthly. The average CPI-W from July, August, and September is
compared with the average of that period from the previous year to determine
the increase. In 2023, for example, that average rose 8.7% above the previous
year’s baseline, triggering the largest increase in four decades.
[RELATED:
MOAA›s COLA Watch]
While
CPI-W figures from earlier in the year won’t affect the calculations, they
serve as a good indicator of where the adjustment could be heading. This year’s
February figures, for example, were 1.1% above the baseline – less than a third
of the increase from the same time last year.
Protecting
Your COL
Just
because the COLA boost may be less than recent years doesn’t make the
adjustment itself any less of a target. A Congressional Budget Office (CBO)
proposal at the start of the 118th Congress suggested the government could save
a quarter-trillion dollars over 10 years by changing how it calculated COLA,
moving to a different index which would erode the value of these benefits over
time.
[RELATED:
How ‘Chained CPI’ Would Reduce Your Military Retirement Benefit]
There
has been no legislative movement in this direction, but with the
administration’s FY 2024 budget proposal just a few weeks old, and with debt
ceiling and other financial pressures mounting, there’s no clarity on what
Congress could put in place. MOAA has fought similar COLA-reduction plans with
great success over the years – you can read a recap of these battles, dating
back more than four decades, at this link.
Keep
up with the latest on this and other MOAA legislative priorities via MOAA’s
Advocacy News page. And be sure to register at MOAA’s Legislative Action
Center, so you can make your voice heard by contacting your lawmakers on issues
of importance to the wider uniformed services community.