Two COLAs and a kicker each year: The good old daze?

When long retired feds speak fondly of the good old days, they aren’t just whistling you-know-what! It was a time of twice yearly cost of living adjustments. And a 1 percent add-on bonus just for good measure. It was the law of the land. Good times, up to a point!

Today we enjoy great advances in the medicine and electronics we inherited. But folks who retired back in the day recall a golden era: A period when they got two cost of living adjustments per year and often got inflation catch-ups that were in the double digits.

Compare that with today. The last COLA that federal, military and Social Security retirees got was 1.7 percent. That was reflected in payments starting in January of this year. And that — small as it was — was the most generous COLA in years. With one more month to go in the inflation tracking countdown it appears there will be no COLA, no increase in retirement benefits, in 2016. So what happened?

A couple of things:

Runaway inflation, which at one point made it almost impossible for people to buy a house, is gone.  Which is good.

With low inflation (and at times deflation) COLAs for retirees lucky enough to get them have been small to nonexistent of late. In 2010 and 2011 the retirees didn’t get a COLA.  In 2012 they got 3.6 percent, but after that the raises were 1.7 percent, 1.5 percent and this year’s 1.7 percent hike.  Better than being kicked by a mule, to be sure, but not much. Certainly not what many retirees, who have their own personal consumer price index, think they should have gotten.

Congress also made changes in the way retirees got increases. At one point they got raises (sometimes twice a year, always with an additional 1 percent add-on) on an accelerated basis.  In the late 1960s and through most of the 1970s retirees got COLAs plus the 1 percent kicker — ranging from 4.5 percent to 7.4 percent each year.  In some years (1974 and 1975) they got a total of four COLAs, 5.5; 6.4; 7.4 and 5.1 percent before politicians, worried about bankrupting Social Security, scaled back the timing of the raises.

During that period of high-speed COLAs, Congress added then took away the 1 percent add-on. But in order to calm retirees, Congress and the White House agreed to a new system which gave retirees COLAs in March and September of 1977 through 1980.  In that four year period retirees got March and September COLAs of 4.3 and 2.4 percent; 4.9 and 3.9 percent; 6.9 and 6.0 percent, and in 1980 6.0 and 7.7 percent.

While those were good times to be on the receiving end, if they — and double digit inflation — had continued, most of the retirement programs would be broke by now.

There’s always a catch!

Nearly useless factoid

Just like fingerprints, every person’s tongue has a unique pattern.

Source: Smithsonian

Copyright © 2024 Federal News Network. All rights reserved. This website is not intended for users located within the European Economic Area.