Shows & Panels
- The 2014 Big Picture on Cyber Security
- AFCEA Answers
- Ask the CIO
- Building the Hybrid Cloud
- Connected Government: How to Build and Procure Network Services for the Future
- Continuing Diagnostics and Mitigation: Discussion of Progress and Next Steps
- Federal Executive Forum
- Federal Tech Talk
- The Future of Government Data Centers
- The Future of IT: How CIOs Can Enable the Service-Oriented Enterprise
- The Intersection: Where Technology Meets Transformation
- Maximizing ROI Through Data Center Consolidation
- Moving to the Cloud. What's the best approach for me
- Navigating Tough Choices in Government Cloud Computing
- The New Generation of Database
- Satellite Communications: Acquiring SATCOM in Tight Times
- Targeting Advanced Threats: Proven Methods from Detection through Remediation
- Transformative Technology: Desktop Virtualization in Government
- The Truth About IT Opex and Software Defined Networking
- Value of Health IT
- Air Traffic Management Transformation Report
- Cloud First Report
- General Dynamics IT Enterprise Center
- Gov Cloud Minute
- Government in Technology Series
- Homeland Security Cybersecurity Market Report
- National Cybersecurity Awareness Month
- Technology Insights
- The Cyber Security Report
- The Next Generation Cyber Security Experts
Shows & Panels
Will retirees get a COLA in 2012?
Tuesday - 8/9/2011, 2:01am EDT
If you want to make a retired friend, neighbor or relative go ballistic (and who doesn't?) tell them the cost of living is going down. Tell him or her that the stuff they want and need costs less than it did a year or two ago. And that you can prove it and they can't dispute it. Then stand back because they may either clock you or faint.
In a world where prices always seem to be going up - from gasoline and rent, to meat, bread and clothing - it is hard for people to believe that we've undergone periods of deflation. That has rarely happened since the Great Depression.
But, the Bureau of Labor Statistics, which has the official yardstick which measures inflation/deflation, said in June its Consumer Price Index actually dipped 0.2 percent. In May it was up 0.2 percent following a rise of 0.5 percent in February and March, and a 0.4 percent increase in April. This is where we were last month.
The CPI readings made by the BLS are very, very important because social security, civil service and military retirement payments are adjusted upward when data shows that the cost of living is up. Retirees got a 5.8 percent cost of living adjustment (COLA) in January 2009 but, thanks to low inflation and periods of actual deflation, they didn't get a COLA in 2010. Or this year.
Retirees are on track for a January 2012 COLA. The increase (or decrease) in the CPI will depend on the CPI numbers for the months of July, August and September. July numbers will be released Aug. 18. If they hold at current levels, CSRS retirees would get something in the neighborhood of 3.3 percent. Those retired under the FERS program would - if they are 62 or older - get one percentage point less. If there are three months where prices drop dramatically, there might not be any COLA.
Don't believe it? Then check this out. It is the official BLS explanation of how it tracks living costs via the CPI process.
And just remember, it could be worse for retirees. Congress and the administration are considering dropping the current system of tracking inflation in favor of another which is more flexible and, backers say, more realistic. Here's the early alert we gave you.
This proposed substitute system, the so-called "chained CPI," would take into account that people adjust their spending habits (going for Hamburger Helper instead of filet mignon) based on prices.
Critics say using a different formula would generally mean smaller COLAs each year for retirees. One member of Congress said it would trim the average social security increase about $1,000 a year. That reduction would be even greater for CSRS benefits which are higher, in some cases much higher, on average than social security payments. Savings to the government would be in the billions of dollars. The loss of income would be the same for retirees.
It will be mid-October (when the CPI data for the month of September is released) before retirees know how much, if any, of an increase they will be getting in January.
To reach me, firstname.lastname@example.org
NEARLY USELESS FACTOID
The average dream lasts 5-30 minutes, according to an article in the The Times of London.
MORE FROM FEDERAL NEWS RADIO
Part 2: Talk Back to Washington
In the second part of the Federal News Radio special report, we explore how small offices, outposts and one-person staffs carry out their agency's mission.
As stocks nose-dive, TSP interfund transfers increase slightly
It may be tempting to change your investments in the Thrift Savings Plan after stocks took a dive today in the first day of trading since the S&P downgraded American debt. But two investment experts say it's best NOT to touch your funds.
Postal Service: Out of cash next month
With no end to the financial bleeding in sight, postal officials said they would default on payments to the federal government due next month.
Where is the best place to work?
Where is the best place to work in the federal government? Fill out our quick survey! (Results will be featured in an upcoming issue of Washingtonian Magazine.)