Retirees to get 1.5 percent COLA in 2014
Federal and military retirees and Social Security beneficiaries will receive a 1.5 percent cost-of-living adjustment in 2014.
- By FederalSoup Staff
- Oct 30, 2013
Federal and military retirees and Social Security beneficiaries will receive a 1.5 percent cost-of-living adjustment in 2014. The COLA is based on the Consumer Price Index for September, a key statistic announced Oct. 30 by the Bureau of Labor Statistics.
The increase affects monthly Social Security and Supplemental Security Income (SSI) benefits for almost 63 million beneficiaries, the Social Security Administration said.
Joseph A. Beaudoin, president of the National Active and Retired Federal Employees Association, called the increase "welcome news," but said that the COLAs do not keep up with retirees' needs.
"Despite the partial relief this COLA will provide, the announcement is a reminder that our method for calculating the rising cost of goods and services is out of sync with the reality faced by millions of federal retirees, Social Security recipients and military retirees, who spend more than twice as much on medical care than the population measured by the CPI-W formula," Beaudoin said in a statement.
“The average 4.4 percent increase in healthcare premiums for federal employees in 2014 shows that medical costs continue to outpace the COLA as it is calculated presently," Beaudoin said. "We need a formula that doesn't force these Americans to take one step forward, then two steps back. While the present formula isn't perfect, a proposed switch to the chained CPI would only make a bad situation worse by further decreasing the hard-earned benefits of Social Security recipients and federal retirees, while increasing taxes on lower- and middle-income taxpayers. "
SSA said the COLA will begin for more than 57 million Social Security beneficiaries in January 2014, while more than 8 million SSI beneficiaries will receive the increases beginning on Dec. 31, 2013.
SSA also said that based on the increase, the maximum amount of earnings subject to the Social Security tax will increase to $117,000 from $113,700 in 2014; about 10 million workers will pay higher taxes as a result of the increase in the taxable maximum.