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1.5 percent COLA coming next year for retirees

Oct. 30, 2013 - 06:00AM   |  
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Retirees will receive a 1.5 percent cost-of-living adjustment effective Dec. 1, with the increase first appearing in January checks.

The increase, based on changes in consumer prices, automatically applies to military and federal civilian retired pay and Social Security benefits.

This year’s hike is less than the 1.7 percent increase in 2012 and 3.6 percent hike in 2011, but far better than the unprecedented two consecutive years of no retired pay increases in 2009 and 2010, when the economy was ailing.

Congress is working on legislation to provide the same 1.5 percent increase to veterans disability compensation, dependency and indemnity compensation and pensions for low-income veterans.

On Monday, the Senate passed S 893 to provide the COLA for veterans. The House has not yet passed a similar bill but is expected to do so in time for veterans to receive the increase at the same time as other federal beneficiaries.

The 1.5 percent increase is calculated by comparing average inflation in the cost of goods and services from July through September of this year to the same period last year. The announcement of the September figure, the last piece of the calculation required to set the COLA, was delayed several weeks by the recent government shutdown.

The Bureau of Labor Statistics, which maintains the Consumer Price Index cost data base, reports a mixed bag in the economy. There have been many increases, such as 1.4 percent in food, 2.4 percent in housing and 3.1 percent in medical care. Conversely, energy prices have dropped 3.1 percent in the last 12 months, including a 7.5 percent decrease in gasoline prices.

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