Military Careers, Retirement - Army Times

Retirement Cost-Of-Living Adjustments

Retired pay rises each year to ensure inflation does not erode retirees’ purchasing power. These cost-of-living adjustments, or COLAs, are based on changes in the Labor Department’s Consumer Price Index, a measure of the costs of certain categories of goods and services, over the final three months of each fiscal year — July through September.

The annual retiree adjustment usually is approved each Dec. 1 and first appears in January retired paychecks. It matches the annual increase in Social Security benefits.

The most recent increase, which took effect Jan. 1, 2007, was 3.3 percent. It was the second consecutive year that the retiree COLA was higher than the annual Jan. 1 increase in military basic pay.