Originally Posted by arebelspy
My pension (Nevada) adjusts but is not tied to CPI.
It stays the same years 1, 2, and 3.
Then goes up 2% years 4, 5, 6.
3% years 7, 8, 9.
3.5% 10, 11, 12.
4% years 13 and 14.
And 5% year 15 and every year beyond that.
(That's part of the reason I'm thinking about retiring a decade before eligible and taking a hit on the amount I'm getting, to max the COLA earlier).
I do not know (on my questions to ask) if it is compounded or on the base amount.
Make sure you have all your contingencies ready financially if you decide to retire earlier, as I know of several states that have reduced COLA'd pensions for existing retirees. Pension reform isn't only being directed at newcomers before they get hired anymore. There has been a lot of reform going on. I'm not a chicken little but who knows what will happen in 10 years. The earlier you retire, the more impact it could have on you. Pensions and COLAs are usually guaranteed by law, but that doesn't guarantee they won't change the law. As I read more about this there are 3 types of government pensions now. 1) Ones that are being proactive in reducing benefits to ensure the soundness of the system 2) Ones that are sticking their heads in the sand and hoping the problem takes care of itself 3) Fully funded systems. The fewest systems are probably number 3 I believe.