Federal Retirees’ COLA Will Be 8.7% or 7.7% in 2023
Federal retirees’ annuities (pensions) will increase either 8.7% (CSRS) or 7.7% (FERS) beginning January of 2023. Social Security payments will also increase 8.7%.
FERS and CSRS Cost of Living Adjustments (COLAs) are calculated slightly differently. The result is that FERS annuitants are not fully compensated for inflation any time inflation exceeds 2%. That causes the purchasing power of the annuity to decline over time.
The COLA calculation is the Consumer Price Index (CPI-W) for urban wage earners and clerical workers from the third quarter average of the previous year to the third quarter average for the current year.
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