COLA will be at least 6.2% for Jan checks

[mickeyd]

Interesting information that I received today from MOAA.

Quote:

Inflation continued its upward trend in July, increasing over June's value by 0.5%. This puts cumulative inflation at 6.2% since October. The July consumer price index (CPI) is the first month used in calculating the annual COLA payable in January. That means that even if there's no inflation throughout August and September, the COLA would be 6.2%. That would be the highest annual COLA since 1982 (8.7%

[haha]

Quote:

Originally Posted by mickeyd Interesting information that I received today from MOAA.

Wow. Back then long term bond rates were in the range of 14%, now they are 4%.

Who killed the vigilantes?

Ha

[Gworker]

Mike Causey on federalnewsradio.com had an article on this today.

Quote:

COLA Cup Runneth Over

Quote:

08/15/08 02:00 Bad news, good news and bad news on the inflation front. The first bad news item is this: Inflation jumped 0.5 percent for the month of July. The higher cost of living is primarily the result of the ripple effect (on food and other items) because of the high price of oil. The good news is that federal and postal retirees under the old CSRS retirement system, retired military people and folks who get Social Security payments are now due a January, 2008 cost of living adjustment (COLA) of 6.2 percent. Last month the 2008 COLA had hit the 5.7 percent level. The second round of bad news involves retired Americans who don't get a federal or military retirement benefit. Most of them don't qualify for any kind of pension from their former employer. Of those that do get a pension, the rise in living costs has no effect on that benefit. The overwhelming majority of those pensions were frozen at the time of retirement. So just how much will the January federal-military-Social Security COLA be? The answer is - it depends. It depends on how much living costs rise (or not) this month and again in September. The COLA is based on the change in the Consumer Price Index from the third quarter of the current year 2008 over the CPI level for the third quarter of the previous year. In this case 2007. That means if the CPI holds steady for August and September the COLA payment will be 6.2 percent. If the CPI goes up either or both months the COLA will increase accordingly. If the CPI should decline (don't hold your breath) the COLA will be adjusted according. Meaning it could, in theory, be less than 6.2 percent. But there would still be an increase.

</H1>

[FIRE'd@51]

With the big drop in oil prices, I think it is very likely that the CPI could actually drop in August.

[laurence]

Wow, I wonder if my employer will be giving me a 6% raise next year. Not holding my breath.

[Nords]

Quote:

Originally Posted by laurencewill Wow, I wonder if my employer will be giving me a 6% raise next year. Not holding my breath.

By the end of the year, employers may be wondering if they're giving out bonuses, let alone raises...

[Notmuchlonger]

My DW got 5%. Then again she is in a needed profession.

[deserat]

To go further on the hijack....I've found that people who perform well get good raises generally - not just cost of living raises......most companies wish to keep the good performers - but then, most people on this board don't work anymore :-) Will you all give yourself a 6.2% COLA from your retirement accounts?

[Notmuchlonger]

Quote:

Originally Posted by deserat To go further on the hijack....I've found that people who perform well get good raises generally - not just cost of living raises......most companies wish to keep the good performers - but then, most people on this board don't work anymore :-) Will you all give yourself a 6.2% COLA from your retirement accounts?

I wouldn't need too. Our expenses aren't up that much this year

[Texarkandy]

Quote:

Originally Posted by laurencewill Wow, I wonder if my employer will be giving me a 6% raise next year. Not holding my breath.

6.2 Cola for mil & fed retirees, huh?

For active employees & mil Bush has proposed 2.9 & 3.4 respectively, but Congress is set to pass 3.9 for both.

You'd think the fed govt would have a sane COLA policy based on some realistic economic indicator & that applies across the board to civilian, military, & retirees without having to go through all these political gyrations every year.

[Spanky]

Quote:

Originally Posted by laurencewill Wow, I wonder if my employer will be giving me a 6% raise next year. Not holding my breath.

Let's keep your fingers crossed.

[Goonie]

Quote:

Originally Posted by mickeyd That means that even if there's no inflation throughout August and September, the COLA would be 6.2%.

COLA'd pensions truly are a wonderful thing! I got a 3% increase in January, and plus another 4.2% increase in July. Next January will be another 3%, and next July will be an additional 4% to 6.25% increase. If I hadn't ER'd, and had kept working, I would have received a whopping 2% pay raise this year. So it really does pay to retire!

[laurence]

Quote:

Originally Posted by Spanky Let's keep your fingers crossed.

Eh, I went from 74k to 97k from July 07 to April 08, I fully expect the megacorp HR to whipsaw me for screwing their metrics up. I'll call it even.

[BLS53]

Quote:

Originally Posted by Goonie COLA'd pensions truly are a wonderful thing! I got a 3% increase in January, and plus another 4.2% increase in July. Next January will be another 3%, and next July will be an additional 4% to 6.25% increase. If I hadn't ER'd, and had kept working, I would have received a whopping 2% pay raise this year. So it really does pay to retire!

What index is your pension linked to that allows those kind of increases?

[Spanky]

Quote:

Originally Posted by laurencewill Eh, I went from 74k to 97k from July 07 to April 08, I fully expect the megacorp HR to whipsaw me for screwing their metrics up. I'll call it even.

Congrats - it's nice to receive a big increase once in a while.

[Spanky]

Quote:

Originally Posted by BLS53 What index is your pension linked to that allows those kind of increases?

The government generous (or misguided) index.

[rs0460a]

Quote:

Originally Posted by deserat most people on this board don't work anymore :-) Will you all give yourself a 6.2% COLA from your retirement accounts?

In answer to your question, "yes". I retired May 1, 2007 but exhaused all "termination" pay by the end of the summer and started to draw from my SPIA and rollover IRA cash holding (in addition to my VA disability, which is at the minimum level) in August, 2007.

I adjusted my monthly budget/withdrawls to my spending levels (via Quicken review) over the last year and believe it or not, it came out to a 6% increase. What's remarkable is that the expense accounts varied drastically (reduction in commuter expenses, gas, lunch, etc.) but then I'm spending a bit more "on the homefront" (basically utilities) since I spend most of my "free time " here.

Since I have another 9.5 years to go before I draw SS, the only adjustement will be to my disability check (which like SS, is always rounded down to a whole dollar amount. The government saves a lot on those pennies!) The additional increase will come from my rollover IRA cash (MM) account.

You asked - that's my situation..

BTW, the company I retired from just announced this week that they are consolidating people and that the local office will be closing in 6-9 months. Being that I'm an "old guy " and able to retire before having to make some serious "life decisions" (like selling/relocating or finding another j*b), that is certainly much more important to me than "annual increases".

- Ron

[Notmuchlonger]

Just imagine the cola if you lived in Zimbabwe..

Zimbabwe copes with an inflation rate of 2,000,000% - Aug. 14, 2008

[NW-Bound]

What pension? What COLA? I worked for private sector corps, and never stayed long enough for any meaningful pension. It was my choice...

By the time I am eligible to draw early SS (a bit more than 10yrs), hopefully I will not ask "What SS?".

Just joking. I am not jealous of older folks who got a pension plan. Just thought my post would cheer up younger members that they are not alone.

You've got to really save, save, save, and be careful with your 401k/IRA investments ...

[Goonie]

Quote:

Originally Posted by BLS53 What index is your pension linked to that allows those kind of increases?

Quote:

Originally Posted by Spanky The government generous (or misguided) index.

BLS53, what Spanky said.....the Gubmint Index. The annual January increase is a 'locked-in' guaranteed amount. The annual July increase fluctuates and is based on some sort of equation based upon # of current retirees and # of Gov't employers paying in to the pension fund.....then the pension fund people do some sort of diabolical cyphering to determine an amount that each of those Gov't employers are required to kick-in to fund the July 'bonus' payment. This year the amount we received was equivalent to 55.405% of our normal monthly pension check. There's legislation pending that would lock the amount in at the equivalent of 75% of our monthly check. That's one reason that I keep active in 'senior affairs', and in touch with our elected officials down at the capitol.