Recent Increases to 2013 COLA

Not all veterans, survivors and military retiree receive the 2013 cost of living adjustment (COLA). Although the COLA went into effect in December 2012, only certain federal retirees get the 1.7 percent increase.

The increase for 2012 retirees is not necessarily 1.7 percent. Service members who left the Armed Forces between April 1, 2012 and Sept. 30, 2012 earn a partial COLA increase based on the calendar quarter in which they retired. For 2012 retirees, the 2013 COLA increases are as follows.

  • January – March: 1.7 percent increase
  • April – June: 1 percent increase
  • July – September: 0.2 percent increase
  • Oct. 1, 2012 or later: no increase

In future years, COLA increases will wholly apply to 2012 retirees, meaning no such breakdown will shrink their COLA.

Service members who enlisted on or after Aug. 1, 1986 may also see a reduced rate. If they accepted a $30,000 bonus at 15 years of service, they also accepted to receive a reduced COLA and retired pay. REDUX retirees earn a COLA that is 1 percent lower than the normal COLA. So their COLA for 2013 is 0.7 percent.

Since 2000, this increase is the fourth smallest. There were no COLAs in 2009 or 2010, and just a 1.4-percent increase in 2002. COLAs are based on the consumer price index (CPI), which is measured by the Bureau of Labor Statistics. The CPI reflects the increase in the prices of general goods and services, known as inflation.

The COLA originates from 1973 legislation. Recipients include Social Security recipients, veterans, survivors and other federal retirees. Through 1982, the pay increases were payable in June, which meant the increases appeared on July checks. Starting in 1983, COLAs became payable in December, so beneficiaries saw the change on January checks.

Check out this list of COLAs since 1975:

July 1975 — 8.0%
July 1976 — 6.4%
July 1977 — 5.9%
July 1978 — 6.5%
July 1979 — 9.9%
July 1980 — 14.3%
July 1981 — 11.2%
July 1982 — 7.4%
January 1984 — 3.5%
January 1985 — 3.5%
January 1986 — 3.1%
January 1987 — 1.3%
January 1988 — 4.2%
January 1989 — 4.0%
January 1990 — 4.7%
January 1991 — 5.4%
January 1992 — 3.7%
January 1993 — 3.0%
January 1994 — 2.6%
January 1995 — 2.8%
January 1996 — 2.6%
January 1997 — 2.9%
January 1998 — 2.1%
January 1999 — 1.3%
January 2000 — 2.5%1
January 2001 — 3.5%
January 2002 — 2.6%
January 2003 — 1.4%
January 2004 — 2.1%
January 2005 — 2.7%
January 2006 — 4.1%
January 2007 — 3.3%
January 2008 — 2.3%
January 2009 — 5.8%
January 2010 — 0.0%
January 2011 — 0.0%
January 2012 — 3.6%
January 2013 — 1.7%
(1)  December 1999 was originally determined as 2.4 percent COLA based on CPIs from the Bureau of Labor Statistics. Pursuant to Public Law 106-554, this COLA is now 2.5 percent.