militaryman
Recycles dryer sheets
Hi friends!
If I have a pension that does not have a cola what would be a prudent amount to save in an etf index fund each year of the pension so that the buying power of the pension is preserved. Is it as simple as finding the CPI each year and saving that amount off the top of the next year's pension payment?
I will start my fers pension in 3.5 years at about 57 y.o. But will have no cola until 62 ad then it is a "diet cola"
(If the increase in the Consumer Price Index that is used to compute the COLA is 2% or less, the COLA is equal to the CPI increase. If the CPI increase is more than 2% but no more than 3%, the COLA is 2%. If the CPI increase is more than 3%, the adjustment is 1% less than the CPI increase. )
How would I compensate for this in retirement planning to equate a level pension amount throughout without saving too much?
If I have a pension that does not have a cola what would be a prudent amount to save in an etf index fund each year of the pension so that the buying power of the pension is preserved. Is it as simple as finding the CPI each year and saving that amount off the top of the next year's pension payment?
I will start my fers pension in 3.5 years at about 57 y.o. But will have no cola until 62 ad then it is a "diet cola"
(If the increase in the Consumer Price Index that is used to compute the COLA is 2% or less, the COLA is equal to the CPI increase. If the CPI increase is more than 2% but no more than 3%, the COLA is 2%. If the CPI increase is more than 3%, the adjustment is 1% less than the CPI increase. )
How would I compensate for this in retirement planning to equate a level pension amount throughout without saving too much?