Will Military Retirement Pay Increase in 2024?
As the new year approaches, military retirees are eagerly awaiting the answer to this question. Will their retirement pay increase in 2024? The answer is a resounding yes, but let’s dive deeper into the details.
The Cost-of-Living Adjustment (COLA)
The COLA is an annual increase in military retirement pay to keep pace with inflation. The COLA is based on the Consumer Price Index (CPI) and is applied to the base pay of military retirees. The COLA is calculated by the Department of Defense (DoD) and is announced annually.
2024 COLA Predictions
The 2024 COLA is expected to be 4.2%, which is slightly higher than the 2023 COLA of 3.8%. This increase will be applied to the base pay of military retirees, resulting in a $24.30 per month increase for a full-career retiree with 20 years of service.
Other Factors Affecting Military Retirement Pay
While the COLA is the primary factor in determining military retirement pay, there are other factors to consider:
- Inflation: As the cost of living increases, so does the COLA. This means that military retirees can expect their retirement pay to increase to keep pace with inflation.
- Promotions: For active-duty personnel, promotions can increase their base pay, which in turn increases their retirement pay.
- Years of Service: The longer a service member serves, the higher their base pay and retirement pay will be.
- Rank: Higher-ranking officers tend to have higher base pay and retirement pay.
How the COLA Affects Military Retirement Pay
The COLA is applied to the base pay of military retirees, which is calculated based on their years of service and final pay grade. Here’s an example of how the COLA affects military retirement pay:
| Years of Service | Final Pay Grade | 2023 Retirement Pay | 2024 Retirement Pay (with 4.2% COLA) |
|---|---|---|---|
| 10 | E-5 | $1,234.00 | $1,281.50 |
| 20 | O-3 | $2,456.00 | $2,546.40 |
| 30 | O-5 | $3,778.00 | $3,942.20 |
As you can see, the COLA increases the retirement pay of military retirees by a fixed percentage, which is based on the CPI.
What Military Retirees Can Expect in 2024
Based on the expected 4.2% COLA, military retirees can expect the following:
- Increased Retirement Pay: Military retirees can expect an increase in their retirement pay, which will be applied in January 2024.
- Higher COLA: The 4.2% COLA is higher than the 2023 COLA, which means military retirees will see a larger increase in their retirement pay.
- Increased Buying Power: With the COLA, military retirees will have more buying power in 2024, as their retirement pay will be adjusted to keep pace with inflation.
Conclusion
In conclusion, military retirement pay will increase in 2024 due to the expected 4.2% COLA. This increase will be applied to the base pay of military retirees, resulting in a higher retirement pay for the new year. While the COLA is the primary factor in determining military retirement pay, other factors such as promotions, years of service, and rank also play a role. As the new year approaches, military retirees can expect an increase in their retirement pay, which will be adjusted to keep pace with inflation.
