Federal Retirees’ COLA Will Be 8.7% or 7.7% in 2023

Arthur Stein |
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.
 
Please let me know if you have any questions.
 
Disclaimers:
 
This is for educational purposes only. To learn more about the topics mentioned and if they are suitable for you, consult an appropriate professional. Tax laws can change at any time.
 
Any information provided in this presentation has been prepared from sources believed to be reliable, but is not guaranteed and is not a complete summary or statement of all available data necessary for making an investment decision. Any information provided is for information purposes only and does not constitute a recommendation.
 
Arthur Stein and Arthur Stein Financial, LLC are not authorized to give legal or tax advice.  For information on your specific situation, please consult your tax advisor regarding any tax implications and your attorney for legal implications. As required by the US Treasury Regulations, you should be aware that this presentation is not intended to be used and it cannot be used for the purposes of avoiding penalties under federal tax laws.
 
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