Q: Why is there no cost of living adjustment (COLA) until age 62? If we retire early (i.e. age 57), we are already penalized and now get no increase in our annuity payments for another five years?
A: This is how the law works. The Office of Personnel Management states that most retired federal employees receiving an annuity under the Federal Employees Retirement System (FERS) are not eligible to receive a COLA under age 62. These are some exceptions:
- Spouse, former spouse, or insurable interest survivor annuitants;
- Certain disability annuitants;
- Those who retired under the special provisions for law enforcement officers, firefighters, and Capitol Police;
- Those who retired under the special provisions for air traffic controllers;
- Those who retired under the special provision for military reserve technicians (age 50, 25 years of service) because they ceased to qualify for military membership on account of disability; and
- Joint Payroll Office FERS Special annuitants
For the 2023 COLA, most FERS annuitants will be eligible to receive it if they were age 62 as of December 1, 2022, the effective date of the 2023 COLA, according to OPM.
OPM also notes that COLA increases for FERS annuitants only apply to the retiree’s basic annuity and not the annuity supplement.
For more information on how the COLA works, see Why Retiring Now Won’t Help You Cash In on the 2023 COLA.