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COLA applied to your high 3 while waiting for deferred retirement to kick in?
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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.
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Originally Posted by: StewieG  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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Originally Posted by: TheRealOrange Originally Posted by: StewieG 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. That's what I understand also. I had 26 years in, considered leaving 8 years short of MRA and 14 years short of 62. Still a fed employee at over 39 years. For fun, I estimated what the pension would have been had I left vs what it will be when I turn 62 in a year. It would have been about 50% of what it will be, had I left those years ago. Many other factors involved, but it's a data point.
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Originally Posted by: StewieG 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. From OPM Quote:High-3 Average Salary
Your “high-3” average pay is the highest average basic pay you earned during any 3 consecutive years of service. These three years are usually your final three years of service, but can be an earlier period, if your basic pay was higher during that period. Your basic pay is the basic salary you earn for your position. It includes increases to your salary for which retirement deductions are withheld, such as shift rates. It does not include payments for overtime, bonuses, etc. (If your total service was less than 3 years, your average salary was figured by averaging your basic pay during all of your periods of creditable Federal service). |
Socialist governments traditionally do make a financial mess. They always run out of other people’s money. --Margaret Thatcher |
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COLA applied to your high 3 while waiting for deferred retirement to kick in?
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