Veterans and military retirees will receive the same 8.7% cost-of-living increase as Social Security recipients next year, federal officials announced last week. The boost is the highest in 42 years. In 2022, the jump was 5.9%. Meanwhile, those in uniform and federal employees are likely to receive a 4.6% pay raise in 2023, the largest boost in two
decades. The difference in the two increases comes from their separate processes. By law, veterans and military retirees receive the Social Security cost-of-living adjustment, which the Social Security Administration announces annually in mid-October. The figure is a product of the monthly Consumer Price Index from the Bureau of Labor Statistics. The CPI measures a broad sampling of costs like rent, groceries and utilities during the preceding 12 months. In
contrast, pay raises for those in uniform and federal employees are part of the government's annual budget cycle, which Congress has the final say on. President Joe Biden requested a 4.6% raise for both groups. Congressional leaders have indicated they intend to provide that amount, but lawmakers have the authority to enact a higher or lower change. The military pay raise will begin in January if Congress approves — and Biden signs — the fiscal 2023 National Defense Authorization Act by the calendar year's end. Some veterans and retirees will see the 2023 Social Security COLA increase in their December checks. About 5 million veterans and 2 million military retirees receive benefits checks monthly. — By John Goheen The 2023 COLA increase will be 8.7%, according to the Social Security Administration. It’s too early to figure out the 2024 COLA rate, but we’ll keep tracking inflation data and other factors that could impact the 2024 COLA increase here. 2022 – 2023 COLAThe Social Security Administration announced the 8.7% COLA increase in October 2022. It’s the largest COLA increase since 1981. The SSA expects it will provide an additional $140 per month to roughly 70 million Americans who receive Social Security and Supplemental Security Income benefits. The record-high 2023 COLA increase came on the heels of a sizeable 2022 increase. The Social Security Administration announced 2022’s 5.9% COLA increase in October 2021. It was the largest increase in 40 years at the time, but the 8.7% 2023 COLA increase has it beat. Soaring inflation, a resurgent economy and other factors have contributed to large COLA increases, according to the Social Security Administration. The U.S. Bureau of Labor Statistics (BLS) compiles the CPI-W. It is the basis for COLA adjustments for military, federal and Social Security recipients. To calculate yearly COLA adjustments, the Social Security Administration compares third-quarter inflation measurements from July, August and September to the same quarter in the previous year. In short, 2022 inflation data determined 2023 COLA rates, and 2023 inflation data will determine 2024 COLA rates.
2023 – 2024 COLA (Cost-of-Living Adjustments) Increase Watch2022 COLA & CPI Summary
2023 COLA Effective and Payment Dates:
2022 COLA (Cost-of-Living Adjustments) Increase ResultsQ3 (July-Sept.) 2022 COLA & CPI Summary
Veterans’ Compensation Cost-of-Living Adjustment Act of 2022In October, President Joe Biden has not yet signed the 2022 cost-of-living increase for veterans, which ties the veterans benefit increases to Social Security COLA increases. Once signed, the legislation will directs the VA to increase – as of Dec. 1, 2022 – the rates for VA disability, additional compensation for dependents, clothing allowances for certain disabled veterans and Dependency and Indemnity Compensation (DIC) for surviving spouses and children. While Social Security benefits are automatically adjusted annually to keep pace with inflation, Congress must pass legislation annually to provide COLA for veterans and surviving family members receiving those types of compensation from VA. Senior citizen household spending may outpace COLA because the measurements that determine COLA don’t reflect significant expenses like healthcare and gas. If Medicare climbs at an equal or higher rate, premiums may offset COLA increases. However, Medicare premiums will decrease in 2023 for the first time in more than 10 years. COLA (Cost-of-Living Adjustment) Affects These Programs and Stakeholders:
Quarterly CPI-W for 2021 and 2022
Monthly CPI-W for 2021 and 2022
The table below shows estimated future cost-of-living adjustments (COLAs) as determined by assumptions in the 2022 Trustees Report. COLA Estimates by Year
The CPI-W takes into account eight major spending categories:
How COLA is DeterminedThe Bureau of Labor Statistics’ Consumer Price Index (CPI-W) determines the annual Cost-of-Living-Adjustment (aka Cost-of-Living Allowance). It is based on the percentage increase of the CPI-W from the third quarter of the previous year versus the current year’s third quarter (July, August, and September). Veterans who retire during the current calendar year will receive a temporary partial COLA due to already receiving a military pay raise in January (View the 2022 Military Pay Charts here).
COLA Versus Federal Pay IncreasesPay increases for current federal workers and COLA for retired workers often differ because they are based on changes in different economic variables. Changes in private-sector wages and salaries determine federal pay increases. The government indexes federal civil service worker pay to private-sector salaries to ensure government pay remains competitive with the private sector. Cost-of-living adjustments (COLA) ensure that a retiree’s income maintains buying power for the same amount of goods and services every year.
Miltary & Veteran DiscountsWant 30+ Military / Veteran Discounts to use today? Enter your email for updates and we'll send them straight to your inbox! What is the military COLA for 2023?The Social Security Administration recently announced a massive 8.7% COLA increase to VA Disability Rates 2023. Disabled veterans with a VA rating of 10% or higher will see their 2023 VA Disability Pay Increase by 8.7% effective December 1, 2022, with an official pay date of January 2023.
Will military retirees get a COLA raise in 2023?Disabled veterans and military retirees will see an 8.7% increase in their Social Security benefits for 2023. On average, Social Security benefits will increase by more than $140 per month starting in January, according to the Social Security Administration.
What will be the COLA for federal retirees in 2023?As predicted a few weeks ago, the 2023 COLA has officially been revealed at 8.7% for Social Security recipients. This means the COLA for federal retirees who receive a CSRS or CSRS-offset pension will also see a 8.7% boost.
What will COLA be for military retirees?2023 Annual Military Retirement Pay Increase
The cost of living adjustment for 2023 will be 8.7% for Social Security checks, VA disability compensation and other government pension and benefit programs. COLA raises for Social Security benefits and certain other benefits are automatic.
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