Military retirees, survivors will see 1.3% increase in COLA for 2021

Defense

Military retirees, survivors will see 1.3% increase in COLA for 2021

Those who spent decades in the military will see a modest COLA increase as coronavirus pandemic continues.

Scott Maucione@smaucioneWFED

November 12, 2020 10:56 am

< a min read

Cost of living adjustments for military retirees are continuing their downward trend in 2021. Those who retired from the military and family members who receive a special survivor indemnity allowance will get a 1.3% increase in 2021.

That’s a slight downturn from the 1.6% increase in 2020 and a further decrease from the 2.8% plus up retirees received in 2019.

Pay increases will start on Dec. 31, 2020.

Survivors eligible for the special survivor indemnity allowance will have their annuity increases capped at $327.

The COLA adjustment is tied to the consumer price index (CPI) comparing the previous year to 2020 stopping at the third quarter. The biggest factors that influence the COLA are the prices of food, clothing, housing, fuel, medical services and drugs. However, more than 80,000 items are factored into the Bureau of Labor Statistics’ CPI calculation.

There are about 2.18 million military retirees.

Social Security recipients are also getting a 1.3% increase in 2020, which averages to about $20 a month for the average worker.

The increase comes as some families are still seeing the economic effects of the coronavirus pandemic. Market volatility may be harmful to private retirement investments.