USA Annual COLA

[ThailandRyan]

Just received an annual update for my 2021 COLA in regards to my pension, and its a whopping 1.23%.  Guess it will buy me a few extra meals out each month.  At least it keeps up with the average inflation index here in Thailand of 1.2%, but I guess its better than a sharp stick to the eye.  Just glad I am here and not in the US where the average is 1.4%.

[connda]

Be glad it wasn't negative 1.23%.

 

[ubonjoe]

I guess you missed this topic posted in October.

I got my COLA letter in December.

Better than 0% or .25% when got a few years ago,

[ThailandRyan]

Thanks UbonJoe, I did miss that.  I guess it all depends if your on SS or a State Pension or a Private company pension as they seem to notice you at different times, and the rates are different depending on when you retired.  My COLA does not go into affect until May.

[cmarshall]

20 hours ago, ThailandRyan said:

Just received an annual update for my 2021 COLA in regards to my pension, and its a whopping 1.23%.  Guess it will buy me a few extra meals out each month.  At least it keeps up with the average inflation index here in Thailand of 1.2%, but I guess its better than a sharp stick to the eye.  Just glad I am here and not in the US where the average is 1.4%.

 

You are apparently talking about a US govt pension other than SS.  So, your COLA has some formula which is intended to approximate the annual rate.  For SS the approximation is to annualize the three-month cumulative inflation rate for the second quarter (July, Aug, and Sept.)   Sometimes that approximation will deviate in a direction that provides SS recipients with a COLA greater than the annual CPI-U and sometimes it will be less.  

 

Generally, developing countries show higher inflation rates than mature economies as this graph comparing inflation between Thailand and the US shows:

 

 

 

[ThailandRyan]

I do know what my formulary is for my CalPERS State Pension.  However, I have always thought that a COLA was designed to keep up with inflation and not lag behind it.

[walt1]

It was a wash more or less for me. SS went up but the exchange rate went down. My state pension looks like it will get a 5% bump this year.

[cmarshall]

19 hours ago, ThailandRyan said:

I do know what my formulary is for my CalPERS State Pension.  However, I have always thought that a COLA was designed to keep up with inflation and not lag behind it.

Depends on who designs the COLA.  The SS COLA for retirees does not keep up.  One of the proposals for reforming SS is to change the inflation index from CPI-U all urban consumers to one for people over 65, which would be more realistic for retirees.

Edited February 15, 2021 by cmarshall