FERS Annuity COLA Question
Hi, I'm 58 years old and in my second year of retirement under FERS after almost 31 years of Federal service. Before joining up in with this group (which is think is an excellent means of exchanging information) I noted the following information from an old thread in 2014:
"One underappreciated issue with FERS is in addition pensions ~ 1/2 of the old CSRS system, there is no COLA until age 62 and then a reduced COLA (up to 1% loss) each yr after. That will result in a substantial loss in pension over a 30-40 y period. If you do the math based on past inflation, in 30 yrs a FERS pension could easily be reduced 30-60%. Still better than no pension so not complaining, but retirement in the later stages will likely depend heavily on TSP."
I indeed understand that any COLA for my FERS annuity does not start until age 62, but I don't understand the comment made regarding "reduced COLA" as explain in the comment above. Does the FERS annuity indeed decrease over time? Many thanks for replies in this area. Threepeaks