A number of readers have been wondering if former federal employees who are now retired will receive a cost of living increase in 2010. If you are one of these folks, here is your answer: There will not be a COLA increase in your annuity payment next year.
The inflation index used to calculate the index will show a negative figure which means there is no automatic increase. (See Your 2010 COLA: Why Your Costs May Be Up But Your Income Goes Down)
This would be the first time benefits have not increased since 1975, when cost-of-living adjustments became automatic.
For those who may be wondering, a decrease in the consumer price index does not mean that your Social Security payment or annuity will decrease.
While this does not represent a financial windfall to many readers, you may get a one-time payment of $250 sometime in 2010. President Obama is asking for this supplemental payment, at a cost of about $13 billion to the government, to go to Social Security recipients, Supplemental Security Income recipients, veterans, railroad retirees and government retirees.
And, in anticipation of the most common question, there will only be one payment during the year if it comes to pass.
The $250 payment would equal about 2% of the annual benefit for the average Social Security recipient. The COLA increase last year was 5.8%, the largest jump since 1982.
"These payments will provide aid to more than 50 million people in the coming year, relief that will not only make a difference for them, but for our economy as a whole," according to President Obama.
The National Active and Retired Federal Employees Association (NARFE) also issued a release which stated: "Federal, state and local government employees who are not eligible to receive Social Secuirty are sometimes left out of such stimulus or relief proposals. NARFE has been working with key congressional committee staff since July to ensure that such federal government retirees and survivors would receive equivalent compensation."