No pay raise? So grab a COLA

Convinced that they will not be getting a pay raise in January — which they probably won’t — some clever, eligible federal workers are considering retiring later this year. The idea is to be on the retirement roles for the January 2019 cost of living adjustment, which now looks like 1.58 percent.

No brainer, right? Well, yes and no. It is great in theory but not so much in practice.

The problem: Time is not on their side.

The amount of the January COLA will not be settled until mid-October. That is when the Bureau of Labor Statistics releases data on the Consumer Price Index-W for the third quarter of this year. The rise in the CPI from the current year’s third quarter over the third quarter figure from last year will determine how big or small the 2019 COLA will be.

That inflation catch-up is a very big deal. In addition to going to federal retirees, people under Social Security and retired military will get the same COLA.

The 2019 COLA will be effective Dec. 1 and payable, as in showing up in your bank account, in January. But COLAs are for retirees, not people who were working during the period when the government was tracking inflation.

The COLA is also prorated based on how many months you were in retirement when the inflation-calculation was being made. In other words you cannot work most of this year then convert to retiree status to qualify for all, or some, of the January 2019 COLA.

If you are disappointed, don’t be. Every time this happens — a COLA but no pay raise — somebody comes up with what seems like a good idea. Feds did not get any pay raises in 2011, 2012 or 2013.

There was no COLA for retirees in 2011 but they did get an inflation catch-up of 3.6 percent in 2012 and another of 1.7 percent in 2013. Then, as now, some frozen feds decided to retire until they found out they would not qualify for all — and in some cases any — of the COLA.

Political endorsements

Meanwhile, the American Federation of Government Employees continues its string of endorsements for Democratic candidates to the House. The latest to get the big white collar union’s nod is Steven Horsford, who is running in Nevada’s 4th District. AFGE said the district has 29,000 active and retired feds, including 19,000 who work for VA facilities.

The union also endorsed Rep. Mike Bost for reelection to Illinois 12th District, which the union said  is home to 12,000 of the state’s 120,000 federal workers.

Many federal-postal unions are hoping to flip the House this November to give Democrats control. A record number of incumbent Republicans who now control Congress are retiring or not running for reelection.

Nearly Useless Factoid

By Amelia Brust

The oldest operational parliament in the world is Althing, also written as Alþingi or Althingi, in Iceland. It was founded in 930 A.D. and discontinued in 1800, until being re-established in 1845.


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Jan 21, 2022 Close Change YTD*
L Income 23.1038 -0.0845 5.42%
L 2025 11.8829 -0.0822 9.75%
L 2030 41.7659 -0.4088 12.37%
L 2035 12.5242 -0.1347 13.43%
L 2040 47.3239 -0.556 14.51%
L 2045 12.9434 -0.1631 15.40%
L 2050 28.3195 -0.3815 16.34%
L 2055 13.8821 -0.2317 19.90%
L 2060 13.8819 -0.2317 19.90%
L 2065 13.8818 -0.2316 19.90%
G Fund 16.7517 0.0007 1.38%
F Fund 20.5326 0.0627 -1.46%
C Fund 66.4328 -1.2799 28.68%
S Fund 73.0036 -1.7193 12.45%
I Fund 38.2607 -0.4114 11.45%
Closing price updated at approx 6pm ET each business day. More at
* YTD data is updated on the last day of the month.