With oil prices on the rise, and inflation moving right along with it, there is a very good chance that the January cost of living adjustment increase for retirees will outstrip the pay raise for working feds.

So a growing number of retirement eligible feds are wondering if they should pull the plug, retire and get the higher of the two increases.

The horse race between a pay raise for workers and a COLA (cost of living adjustment) for retirees has some working feds thinking about retiring soon to get what might be a higher COLA. While it’s a great idea, in theory, in practice it stinks. More on that in a second.

First the pay-COLA picture:

Currently, federal and military retirees (and people who get Social Security) are looking at January cost of living adjustment of 3.5 percent. The final COLA will be determined by the increase in inflation between now and September 30th.

The House last week okayed a 3.5 percent raise for uniformed military personnel. But it made no mention of civilian federal employees. President Bush proposed a 3.4 percent raise for the military and 2.9 percent raise for federal workers.

Federal unions, and a bipartisan pro-fed group on Capitol Hill, are pushing for pay raise parity. That means civilian feds would get the same percentage pay raise as that granted the military.

Odds are good that the military will get the 3.5 percent. There’s a war on and this is an election year. And, they deserve it. The average soldier, sailor or Marine makes a lot less (any way you slice the perks) than me. Or you.

But there is no guarantee, because this is an election year, that Congress will go to the mat with the White House and push for a higher (3.5 percent) federal pay raise. Stay tuned…

Meantime, if you want to get the full January retiree COLA and you are still working, you are toast. You can’t leave this month, or next month, or Dec. 31, and get the full COLA. Reason: The COLA is for people who were actually retired during the inflation-measuring period which, if you are still working, you weren’t!

In order to get the full January 2009 COLA, you must have been retired before December 2007. Then you’ll get the full 2009 COLA . If you retired last January you will get 11/12th of the COLA and so on. Waiting until July of this year would give you 5/12ths of the COLA.

This issue comes up every year. For a detailed explanation of how it works, and why you can’t retire just before the COLA and get the full amount, click here.

Bottom line, you can’t take it with you. On the other hand, if you find a way, let us know ASAP!

Nearly Useless Factoid

According to the history of bras on Wikipedia, during World War II, “defense contractor Lockheed informed their workers that bras must be worn because of ‘good taste, anatomical support, and morale'” thereby uplifting more than spirits.

To reach me: mcausey@federalnewsradio.com

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