Veterans have seen their pensions and benefits increase for 2023 amid record-high inflation.
The cost of living adjustment (COLA) was increased by 8.7 percent in October last year – the largest increase in history.
The rise came just months after the US recorded inflation of 9.1 percent in June – a 40-year high.
That means retirees pocketed an extra $87 for every $1,000 they receive each month as part of their pension.
Air Force Col Douglas Fowler has revealed how veterans can avoid losing and has warned of the so-called COLA trap.
He revealed that military retirement pay and COLA are calculated on the month and year a person retires, Military.com reported.
In a newspaper, he revealed that Lt. Cols Johnny Late and Jane Early enlisted in the Air Force together and served 20 years.
But Late retired a month after Early, pocketing a pension of $1,000 less a year when they received their first COLA.
This is because the first COLA is calculated based on several factors, e.g. B. the month in which an American retires.
The first COLA compares the difference in inflation between quarters of the same year.
For retirees, the difference between the third quarter of the year and the quarter before retirement is calculated.
Americans who enlisted before September 8, 1980 and retired before January 1, 2022 would have seen their pension payment increase by 8.7 percent.
But those who retired during 2022 received a 7 percent increase, according to the Defense Department.
Fowler told Military.com, “This disparity only widens when each subsequent COLA is appended as an additional percentage. Imagine the difference adding up over the course of a decade to a truly beautiful car.”
However, the annual COLA is determined by inflation from year to year – July-September 2022 and July-September 2021.
Fowler urged soldiers approaching retirement age to think twice before deciding so they might not lose.
He claimed March is one of the best months to retire as COLA is larger.
He warned the military not to retire on July 1.
Fowler said, “These retirees can get a really bad deal.”
He suggested that service members should retire in the final quarter of the year.
And Americans who serve longer receive an increased pension payment.
Soldiers who joined after September 1980 have their pensions calculated based on their 36 highest months of military pay.
Meanwhile, The US Sun reported how millions of Americans will be paid Social Security benefits.
Seniors could pocket a maximum benefit of $4,555.
And millions of SSI applicants will receive an increased payment of $914 within weeks.
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