Retirement life after COLAs disappear
By Mike Causey
Lots of federal workers, both active and retired, are really sweating the Trump administration's plan to eliminate cost-of-living adjustments for current and future retirees under the FERS retirement plan. And they are worried for good reason.
Dropping COLAs in the future would save the government lots of money. And it would quickly eat into future Ogden, Utah to Huntsville and Anniston, Alabama. Plus lots of fed voters in Oklahoma, including Oklahoma City and Norman, as well as many semi-rural areas where VA hospitals, federal prisons and Army, Navy and Air Force Bases are big, if not the biggest, employers. Retirees who are not bound by the Hatch "no politics" Act could also play a major make-or-break role in the 2018 mid-term elections.
The chart below, worked up by Stein, shows what would happen in the future if the FERS COLA is eliminated. It shows the annual reduction in annuity payments if inflation is either 2 percent, 3 percent or 4 percent. Over as little as 10 years, a 72-year old retiree would "lose" — as in not receive — up to 18 percent in COLA payments if inflation was 3 percent, and lose up to 26 percent if inflation during the period averaged 4 percent.
Posted by: sarah_oz@yahoo.com
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