Retirees likely to be 'pleasantly surprised' with first COLA since 2008

Friday - 10/7/2011, 4:44pm EDT

Tammy Flanagan, senior benefits director, National Institute of Transition Planning

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For the first time in more than three years, federal retirees will likely get a cost-of-living adjustment. For some, that increase may be as much as 4 percent.

Federal retirees will be "pleasantly surprised," said Tammy Flanagan, senior benefits director at the National Institute of Transition Planning, in an interview with In Depth with Francis Rose.

Flanagan said the COLA is for retirees, separate from the "congressionally-approved, politically-motivated pay increase in January" for federal employees that isn't looking likely for next year.

The COLA, however, is tied to inflation and applies to federal and military retirees and social security recipients.

"It's pretty much inevitable," Flanagan said of the COLA in 2012.

Many feds have asked Flanagan when the best time is to retire to take advantage of the COLA. Her response is, "You have to be retired in the year the COLA is calculated; you'd have to be retired in 2011. So even if somebody retired at the end of October, they would only be retired one month because the COLA comes due on Dec. 1, so they only get 1/12 of it. It's kind of late for somebody retiring this year to get any or too much of the COLA we're talking about."