Federal News Radio reports that the Social Security Administration has confirmed that retirees will receive a 3.6% cost of living adjustment in January. The COLA also applies to federal pensioners:
Federal retirees under the old Civil Service Retirement System receive the full COLA amount.
However, there is a slightly different system for retirees under the Federal Employees Retirement System. If the COLA is more than 3 percent, FERS retirees will receive 1 percent less than the general increase. If the COLA is between 2 percent and 3 percent, FERS retirees receive just a 2 percent increase.
For example, with a COLA of 3.6 percent, FERS retirees can expect to receive a 2.6 percent increase.
However, most FERS retirees will not have the COLA applied to their annuity until age 62.