How Do The FERS Pension COLAs Work??

In this video, Jose Armenta, CFP®, reviews the FERS COLAs and how they keep up with inflation.

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Until next time, take care!
Jose Armenta, CFP®

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[RiverogueLander]

They arent keeping up now, why should they in the future? This year we had 20% real inflation. But pensions only rose by 5.9%

[roachtoasties]

Federal salaries haven't kept up with inflation by a larger amount. I think next year Feds will get about a 2.8% adjustment, with inflation close to 6%. Those CPI figures don't take into consideration the huge increase in housing and healthcare costs. A Federal employee just starting out in an area like Los Angeles will have huge housing costs. The cost of homes and rent is astronomical. If this employee is lucky enough to start at a $50, 000 per year salary, he or she could well be homeless. At least with FERS, even though it doesn't keep up with the CPI, your Social Security portion does. In any event, we got to hope to win the lottery.