2024 COLA Announced for FERS ; image: woman and grandma at grocery store

The 3.2% Cost-of-Living Adjustment (COLA) will apply to CSRS and Social Security. FERS annuitants will see a 2.2% adjustment.

A little higher than the 3.0% predicted at the end of August, the Social Security Administration recently announced next year’s COLA for Social Security benefits will be 3.2%. This means the COLA for federal retirees who receive a CSRS or CSRS-offset pension will also a 3.2% boost. Because those who retired under FERS get 1% less when the annual COLA is 3% or higher, income distributed to FERS retirees will see an increase of 2.2%. The upcoming adjustment is not as high as the previous two years: 5.9% (2022) and 8.7% (2023). However, it is still the third highest in the past decade. The 2012 COLA was 3.6%.

What if I Retired This Year?

While social security recipients receive the full adjustment even if they first claimed retirement benefits during the same calendar year, FERS and CSRS annuitants who retired in 2022 will see the upcoming COLA prorated. For instance, if you retired in January 2023, your pension will see 11/12ths of the 3.2% (CSRS) or 2.2% (FERS). Retiring in February would mean 10/12ths of the adjustment can be expected, and so on.


Need to learn more about social security, FERS, CSRS, or Medicare? Check out our no-cost webinars, featuring Ed Zurndorfer


It is also important to remember that other that FERS retirees with special provisions or under disability, there is no COLA for FERS payments if you are not yet age 62. If you turned 62 this year, but have been retired for the full year, you can expect the full COLA and not a prorated one.

How is COLA Determined?

The annual cost-of-living adjustment is calculated using the CPI-W index (consumer price index for urban wage earners and clerical workers) over the last three months of a given fiscal year. Going off the CPI-W, inflation for July was 2.6%, 3.4% for August, and 3.6% in September. Averaging these three numbers is what resulted in a 3.2% COLA for 2024.

2024 Medicare B Premiums

The premiums for Medicare B are also set to increase 5.94% to $174.70 monthly. As these premiums are deducted directly from social security, this actually offsets the 3.2% increase so social security checks will actually decrease by a net -2.74% if enrolled in Medicare part B. Similarly, FEHB premiums are increasing by an average of 7.7%.

----

Until Next Time,

Benefits Ben, STWS

The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Serving Those Who Serve writers  and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **

2024 COLA Announced for FERS ; image: woman and grandma at grocery store

2024 COLA Announced for FERS: 2.2%