The Social Security Administration recently announced that the COLA (cost-of-living) increase would be 1.6%, based on inflation and consumer spending calculations over the last few months. The increase will go into effect for about 69 million Social Security beneficiaries soon, with most seeing it in January 2020.
The Military Times recent article, “Veterans, military retirees to see a 1.6 percent cost-of-living boost in benefits,” reports that military retirees and veterans benefits recipients will enjoy a 1.6% cost-of-living boost in their payouts beginning in December. That’s about half of the increase they received in 2018.
However, those vets getting certain military and veterans payouts will get the raise a month earlier, due to differing payroll schedules for federal agencies. Under a law enacted last month, the cost-of-living boost for those benefits is connected to the Social Security calculations.
The adjustment is likely to make a lot of VA benefits beneficiaries upset, because of the decrease from last year’s COLA calculation. That raise was 2.8%—the second consecutive year that vets saw an increase of more than 2.0%.
For a 100%-disabled veteran who’s married, the new increase means about $49 more a month. A retired E-7 with 20 years’ service will get roughly $38 more with the increase, and a retired O-4 with 20 years will get about $65 extra a month.
The cost-of-living boost is much less than the pay raise military members are looking forward to in 2020. Lawmakers in the House and Senate in recent months have proposed measures (but haven’t finalized them) to up active-duty salaries by 3.1% next year. That would be the biggest increase they have seen in a decade.
The calculations for that increase are based on civilian section wage growth, instead of the consumer cost data that’s used for the Social Security bump.
However, even a smaller COLA this year than last is more than what beneficiaries received in 2017. That increase was a measly 0.3%. and in 2016, Social Security payouts were held without any adjustment.
Reference: Military Times (October 11, 2019) “Veterans, military retirees to see a 1.6 percent cost-of-living boost in benefits”
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Suggested Key Terms: Tax Planning, Financial Planning, VA Benefits, Retirement Planning, Social Security, Veterans