Where Could Your COLA Land in 2023?

Where Could Your COLA Land in 2023?
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The economic indicator responsible for setting the cost-of-living adjustment (COLA) for military retirees, disabled veterans, Social Security recipients, and others has edged even closer to record-setting territory.

 

Frequent visitors to MOAA’s COLA Watch page won’t be surprised by this trend, but new figures point to an even larger adjustment in 2023 to combat ongoing inflation.

 

The March Consumer Price Index for Urban and Clerical Workers (CPI-W), a figure released in April, was 1.52% higher than the February number. It’s the largest February-to-March jump for CPI-W since at least 1978, when the statistic underwent a major revision and name change.

 

While the figures determining the annual COLA won’t be set until later in the year – a walkthrough on the math is available at MOAA.org/colawatch – predictions point to a major uptick from last year’s 5.9% COLA. The Senior Citizens League, a nonpartisan advocacy group, predicted an 8.9% 2023 COLA increase based on the March data. That’s up from the group's 7.6% estimate the previous month.

 

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If that figure holds, it would be the third-largest COLA since 1975, behind an 11.2% increase in January 1982 and a 14.3% boost the previous year. No other increases topped 10%.

 

COLA Challenges

Why monitor this figure? Aside from financial planning purposes, MOAA’s advocacy team tracks these numbers for a very simple reason – after the COLA hikes in the early 1980s, Congress attempted to claw back COLA from military retirees to boost other parts of the federal budget.

 

In addition to a series of COLA delays from 1982 to 1986, Congress passed a 1985 law ending automatic spending increases, including COLA increases for military retirees (Social Security beneficiaries and other groups were exempted). This threat to retirees’ earned benefits led to the formation of The Military Coalition, what was then a group of 15 associations united against this unfair treatment.

 

Thanks in part to the efforts of MOAA (then TROA, The Retired Officers Association) and the coalition, Congress rejected a White House plan to eliminate COLA for military retirees in 1987. The move ended the immediate threat to the value of military retirement, though challenges would continue through the decades.

 

Now, as COLA reaches historic highs and budget pressures begin mounting, MOAA stands watch to protect your benefit from lawmakers or administration officials who may not appreciate the value of service – who may not understand a proposal to shave a percentage point or two from your COLA may look good on the bottom line, but could prove disaster to military retirees attempting to stretch their earned benefit as prices skyrocket.

 

Keep track of these efforts and others at MOAA’s Advocacy News page or via The MOAA Newsletter.

 

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About the Author

Kevin Lilley
Kevin Lilley

Lilley serves as MOAA's digital content manager. His duties include producing, editing, and managing content for a variety of platforms, with a concentration on The MOAA Newsletter and MOAA.org. Follow him on Twitter: @KRLilley