After a couple of years with NO COLA increase, military retirees received a 3.6% COLA effective December 1, 2011. The increase will show up in your January 2012 check. This is the same percentage increase that Social Securities beneficiaries will receive.
If you retired before 2011, you can expect a 3.6% Cost-of-Living Adjustment in 2012, unless you received a Career Status Bonus (CSB). The adjustment for CSB recipients is 2.6%.
Those who retired from the military in 2011 might receive a partial COLA.
Retirees’ COLA increase this year is larger than the active duty pay increase because COLA (and Social Security) is tied to the consumer price index, while military pay is tied to private-sector wages. (So what that means is that active duty families’ pay increases are not keeping up with inflation. And that’s just wrong.)
Military retirees’ and annuitants’ COLA for 2010 AND 2011 was 0%. For many, this meant their retired pay amount actually decreased slightly in 2010, due to changes in income tax withholding and an increase in Medicare premiums for some. So the 3.6% increase for 2012 was definitely welcome.