2012 COLA Increase 

It’s offi­cial, mil­i­tary and fed­eral civil­ian retirees, sur­vivor ben­e­fit annu­i­tants, dis­abled vet­er­ans and Social Secu­rity recip­i­ents will see a 3.6 per­cent cost-of-living adjust­ment in Jan­u­ary, their first since 2009.

The 3.6% COLA will be effec­tive Dec 1 and will be reflected in Jan­u­ary retired pay, SBP, Social Secu­rity, and VA dis­abil­ity com­pen­sa­tion checks.

COLA is calculated by comparing the average inflation (as measured by the Bureau of Labor Statistics’ Consumer Price Index (CPI) from 3rd quarter 2011 (223.2) to the baseline of 3rd quarter 2008 (215.5). The 2008 baseline must be used because the baselines for 2009 and 2010 were below that figure, and the law doesn’t allow a negative COLA.
For the month of September, the CPI figure is 223.688 -- a 0.2 percent increase from August.
For the Jul-Sep 2011 baseline period, the average CPI was 223.2. That is 3.59% above the 2008 baseline of 215.5, which rounds to 3.6% under the COLA law.

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