Will Retired Military Get a Raise in 2024?
As the year 2024 approaches, many retired military personnel are eagerly awaiting the annual Cost of Living Adjustment (COLA) increase in their pensions. The question on everyone’s mind is: Will retired military get a raise in 2024? Let’s dive into the latest updates and projections to answer this question.
Historical Context
To understand the potential raise in 2024, it’s essential to look at the history of COLA adjustments. Since 1977, the COLA is automatically calculated and implemented annually based on the previous year’s Consumer Price Index (CPI). The formula for calculating COLA is simple:
- COLA = CPI inflation rate
If the CPI inflation rate increases, so does the COLA, which translates to a pension increase for retired military personnel.
CPI Projections for 2024
The most recent CPI projections from the Bureau of Labor Statistics (BLS) for the year 2024 suggest a 2.1% inflation rate. This rate is relatively moderate compared to previous years. Using this projection, let’s calculate the potential COLA for 2024:
- COLA = 2.1%
- Average annual pension = $35,000 (assuming a typical military retirement pension)
Projected 2024 COLA Adjustment
Using the 2.1% CPI inflation rate, the projected COLA adjustment for 2024 would be:
- $35,000 (average annual pension) x 2.1% = $735.00
This translates to a $6,090.00 annual raise for retired military personnel with an average annual pension.
Notable Factors that Might Impact the 2024 COLA
Several factors could influence the 2024 COLA calculation, including:
• Inflation rate volatility: A significant change in inflation rates between now and January 2024 could affect the COLA calculation.
• Economic growth: Strong economic growth or recession could impact the inflation rate, leading to adjustments in the COLA.
• Government spending and budget: Changes in government spending and budget decisions might impact the COLA calculation.
• Policy updates: The Department of Defense and the Office of Personnel Management might adjust policies, such as the COLA formula, which could impact retiree benefits.
Projected COLA Adjustments by Year
Here is a table outlining projected COLA adjustments from 2021 to 2025, based on BLS CPI projections:
Year | CPI Inflation Rate | COLA Adjustment |
---|---|---|
2021 | 4.5% | 4.5% |
2022 | 5.5% | 5.5% |
2023 | 2.6% | 2.6% |
2024 | 2.1% | 2.1% |
2025 | 1.9% | 1.9% |
Conclusion
While there is no definitive answer yet, based on the latest CPI projections, retired military personnel can expect a 2.1% COLA adjustment in 2024, translating to a $735.00 increase in their average annual pension. However, it’s essential to remember that actual numbers might change due to the factors mentioned above. Keep an eye on inflation rate updates, economic changes, and policy decisions for potential adjustments.
Recommendation
For retired military personnel, it’s crucial to stay informed about changes in COLA calculations and budget decisions. Consider:
- Regularly checking government websites, such as the Defense Finance and Accounting Service (DFAS) or the Office of Personnel Management (OPM), for updates on COLA and other retiree benefits.
- Reviewing and understanding the impact of COLA on their pension income.
- Staying in touch with peers and organizations, such as the Military Officers Association of America (MOAA) or the Veterans of Foreign Wars (VFW), to stay informed about retirement benefits and policy updates.
By staying informed and vigilant, retired military personnel can make the most of their retirement benefits and navigate potential changes in the 2024 COLA calculation.