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Retirement Planning


Whether you are close to federal employee retirement or just starting out in your career, this is the place to share ideas with your federal colleagues on creating a secure financial foundation.


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StewieG  
#1 Posted : Wednesday, June 22, 2022 8:31:43 PM(UTC)
StewieG

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Does your High-3 salary get adjusted for COLA while you are waiting for your deferred retirement to kick in?

Example: let’s say I retire at age 40, with 20 YOS. My entitlement is 1.0 x 20 = 20%. Let’s say that my highest 3 years salary was $100k. I can apply for deferred retirement, and in 20 more years it will kick in. Will my pension be 20% x $100k = $20k/yr? Or will it be 20% x $100k x COLA for the years I was 40-60 = more?

If the COLA isn’t computed in it seems like you take a BATH in inflation.
TheRealOrange  
#2 Posted : Thursday, June 23, 2022 4:20:39 AM(UTC)
TheRealOrange

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Originally Posted by: StewieG Go to Quoted Post
Does your High-3 salary get adjusted for COLA while you are waiting for your deferred retirement to kick in?

Example: let’s say I retire at age 40, with 20 YOS. My entitlement is 1.0 x 20 = 20%. Let’s say that my highest 3 years salary was $100k. I can apply for deferred retirement, and in 20 more years it will kick in. Will my pension be 20% x $100k = $20k/yr? Or will it be 20% x $100k x COLA for the years I was 40-60 = more?

If the COLA isn’t computed in it seems like you take a BATH in inflation.

Based on everything I've read, I don't think the COLA will be applied until after the retirement, i.e., inflation could have a big impact. As I understand, FERS annuitants are not eligible to receive a COLA until January 1 after the year they become age 62. This means that a former FERS-covered employee with more than 19 years of service who opts for a deferred retirement, and is eligible to start receiving his or her FERS annuity before age 62, will not be eligible to receive a COLA to their FERS annuity until January 1 after the year after they become age 62. I haven't seen anything to indicate that the high-3 will be adjusted at all during the deferral period.
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