Final COLA Prediction: Where the 2024 Increase Could Land

Final COLA Prediction: Where the 2024 Increase Could Land
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By MOAA Staff


With just a few weeks before final calculations can be made, the annual cost-of-living allowance (COLA) for military retirees, VA disability recipients, Social Security beneficiaries, and others receiving certain federal payments for 2024 is settling in at a higher-than-expected figure … one that’s still well below last year’s adjustment.


MOAA predicts the upcoming COLA will be 3.2%, down 5.5 percentage points from last year’s 8.7% increase. It’s the smallest figure in three years, but it’s just the fifth time in 20 years the adjustment has reached 3% or higher.




The Math

The COLA figure stems from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), an inflation-tracking metric updated monthly by the Bureau of Labor Statistics. CPI-W figures from July, August, and September are averaged, and the percentage increase of that number over the previous year’s average results (known as the “base”) is the new COLA rate.


The average of this year’s July and August figures (300.725) would yield a 3.0% COLA increase when compared with last year’s base (291.901). If the September figures continue the average rate of increase seen since May, the final figure will result in the 3.2% projection. A second higher-than-expected bump in CPI-W could move that figure up, but likely only by a tenth of a percentage point.


MOAA will update its COLA Watch page on Oct. 12, after the release of the September figures (likely mid-morning), to reflect the 2024 calculations.


MOAA’s Role

The cold calculations make the process of an inflation adjustment for military retiree pay seem automatic and predictable. Unfortunately, that hasn’t always been the case.


From proposals in the 1980s to eliminate the military retiree COLA entirely to a 2010 commission’s report suggesting a deferral of all military retiree COLA until age 62, the adjustment regularly comes under scrutiny on Capitol Hill. The most recent major threat came in 2013, when a continuing resolution included language creating “COLA minus 1 percent” for retirees under 62 – a reduction to the military retirement benefit that would’ve cost younger retirees tens of thousands of dollars in earned benefits.


MOAA rallied alongside our partners in The Military Coalition at the time to secure a change to the law in early 2014, before the change could take effect.


[RELATED: Why COLA Is a Battlefield for Your Earned Benefits]


More recent threats have come not by targeting military retirement pay, but by plans to change how the overall COLA is calculated. A Congressional Budget Office (CBO) proposal to move from CPI-W to a metric called “Chained CPI” would save the government more than $250 billion over 10 years, per the CBO’s math – with some of that money removed from the pockets of military retirees counting on their earned retirement income.


This proposal has yet to take form in legislation. But as budget battles boil over on Capitol Hill and lawmakers look for cost-cutting solutions amid shutdown threats, MOAA stands ready to make your voice heard and protect all earned benefits, including the value of military retirement pay, from potential cuts.


You can keep up with MOAA’s latest advocacy efforts by visiting MOAA’s Advocacy News page. And by registering for MOAA’s Legislative Action Center, you’ll be able to contact your lawmakers about issues of importance to MOAA and the wider uniformed services community.


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