Military retirees and disabled veterans will see their monthly checks increase by 3.2% for 2024, thanks to the annual Cost of Living Adjustment (COLA) due to inflation.
While 3.2% may look low compared to the 2022 (5.9%) and 2023 (8.7%) adjustments, it's still above the average of 2.6% for the prior 20 years.
The Social Security Administration announced the COLA increase Oct. 12. Most government disability and retirement payments are required by law to increase annually by the same amount.
Retirement Pay Increase
For 2024, retired military members will see a $32 increase for each $1,000 of military retirement pension they receive each month.
Retirees who entered military service on or after Aug. 1, 1986, and opted for the Career Status Bonus (CSB/Redux retirement plan) will have any COLA increases reduced by a percentage point, so they will see a smaller increase of $22 per $1,000 in 2024.
Survivors receiving Survivor Benefit Plan payments will see their payments increase by the same amount as retirees.
Service members who retire in 2023 will see a slightly reduced COLA in 2024. Their COLA is prorated based on which quarter they retire in (January-March, April-June, etc.). The prorated amount may also be adjusted based on when a member entered the service and which retirement plan they elected.
VA Disability Increase
Disabled veterans will also see their benefit payments increase in the upcoming year. VA disability checks will go up about $5.31 per month for those with a 10% rating and $115.90 for those rated at 100% who don't have dependents.
Dependency and Indemnity Compensation (DIC) benefits for surviving spouses of disabled veterans also increase in 2024. Here are the VA Dependency and Indemnity Compensation Rates for 2024.
Other Federal Retirees and Beneficiaries
Military retirees and VA beneficiaries aren't the only ones who benefit from the COLA increase. Civil Service retirees and Social Security recipients also will see the 3.2% jump in their monthly checks.
For Social Security recipients, the monthly increase will mean an extra $50-plus per month for the average beneficiary, according to the administration.
How the COLA Is Determined
The Department of Labor determines the annual COLA by measuring the Consumer Price Index (CPI), a measurement of a broad sampling of the cost of consumer goods and expenses. The CPI is compared to the previous year; if there is an increase, there is a COLA. If there is no increase, there is no COLA, and benefits will remain the same -- not decrease.
The COLA increase affects about one in every five Americans.
Retirement and VA Disability Pay Offset
Military retirees with combined VA disability ratings of 40% or lower whose injuries are not combat related can only receive that amount in either their retirement pension or their disability check, but not both. That rule is known as an “offset” and is a matter of law. Since disability pay isn’t subject to federal income tax but retirement pay is, most veterans elect to receive it instead of their retirement pension for the offset amount.
That means even though both retirement and disability payments will see the COLA increase, some veterans will benefit from only one, not both.
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