What age is FERS Cola for? Navigating COLA Eligibility for Federal Retirees

For most federal employees under the Federal Employees Retirement System (FERS), Cost-of-Living Adjustments (COLAs) are not automatically applied immediately upon retirement. A key consideration for retirement planning is understanding at what age is FERS Cola for and the specific exceptions that allow for earlier adjustments.

Quick Summary

COLA eligibility for FERS retirees generally starts at age 62, though exceptions exist for special provision employees, disability retirees, and survivors. Different rules apply based on retirement type and age, with no COLA on the FERS Annuity Supplement.

Key Points

• Age 62 is the Standard: Most non-disabled FERS retirees must wait until age 62 to begin receiving Cost-of-Living Adjustments (COLAs).

• Special Provisions Exception: Law enforcement officers, firefighters, and air traffic controllers receive COLAs immediately upon retiring, provided they meet specific criteria.

• Disability and Survivor Benefits: FERS disability retirees and survivors are generally eligible for COLAs regardless of age, with some initial limitations for certain disability calculations.

• No COLA on FERS Supplement: The FERS Annuity Supplement, paid to retirees under age 62, does not receive COLAs and its value remains fixed.

• No Retroactive COLAs: If you retire before age 62, you do not get back-dated COLAs for the years your annuity was unadjusted.

• CSRS Component Exception: FERS annuitants with a CSRS component will have that portion of their annuity adjusted according to CSRS COLA rules, which can start before age 62.

FERS COLA Age Rules for Standard Retirees

For the majority of federal employees retiring under the standard FERS program, Cost-of-Living Adjustments (COLAs) typically begin at age 62. This means if you retire earlier, your basic annuity remains fixed until you reach 62. These adjustments are not retroactive. This approach differs from the Civil Service Retirement System (CSRS), where COLAs usually start immediately upon retirement. FERS incorporates Social Security and the Thrift Savings Plan (TSP), both of which have their own inflation adjustments, influencing the FERS Basic Annuity's COLA structure.

Exceptions to the Age-62 FERS COLA Rule

Certain FERS retirees can receive COLAs before age 62, based on their profession or the nature of their benefit.

Special Provision Employees

Federal employees in specific roles with demanding duties, such as law enforcement officers, firefighters, and air traffic controllers, may fall under special provisions. These individuals are often eligible for immediate COLAs upon retirement, provided they meet their program's age and service requirements.

Disability Retirement

FERS disability retirees generally qualify for COLAs regardless of age. However, if the disability annuity is calculated based on 60% of the high-3 average salary, COLAs are deferred during the first year of eligibility. After this initial period, or if the annuity is based on an earned benefit, COLAs are payable.

Survivor Benefits

Survivors of federal employees or annuitants receiving FERS benefits, such as children and spouses, are typically eligible for COLAs, often without an age requirement. This helps maintain the value of their benefits against inflation.

FERS Annuity Supplement and COLAs

The FERS Annuity Supplement, designed to provide income until Social Security eligibility, does not receive COLAs. Its value remains constant until it typically ends at age 62 when Social Security benefits can begin. Consequently, its purchasing power diminishes over time due to inflation.

FERS vs. CSRS COLA: A Comparison Table

Here is a comparison of COLA rules for FERS and CSRS:

Feature	Federal Employees Retirement System (FERS)	Civil Service Retirement System (CSRS)
Standard COLA Start Age	Age 62 for most non-disabled retirees.	Immediate upon retirement, regardless of age.
Special Provisions COLA	Immediate upon retirement for qualifying employees (e.g., LEOs, Firefighters, ATC).	Immediate upon retirement.
Disability Retirement COLA	Immediate, with a 12-month exception for some computations.	Immediate upon retirement.
Survivor Benefits COLA	Immediate for eligible survivors.	Immediate for eligible survivors.
FERS Annuity Supplement COLA	Not subject to COLAs; payment remains fixed.	Not applicable.
COLA Calculation	Limited if inflation is over 2% or 3%.	Generally equals the full percentage change in the CPI-W.

Conclusion

Understanding what age is FERS COLA for is essential for federal retirement planning. While the standard is age 62, exceptions exist for special provision employees, disability retirees, and survivors, who may receive COLAs earlier. Remember the FERS Annuity Supplement does not have COLAs, impacting its long-term value. Consulting OPM resources is recommended for specific eligibility details. Although legislative proposals aim to modify COLA calculations, current rules remain in effect.

Additional Considerations for Retirement Planning

Different retirement choices can affect COLA timing. For instance, postponing retirement might avoid age-based annuity reductions. FERS retirees with prior CSRS service will find that the CSRS portion of their annuity follows CSRS COLA rules, potentially starting before age 62.

Impact on Purchasing Power

Retiring before age 62 under standard FERS means the absence of COLAs on your basic annuity for several years, which can reduce purchasing power during inflationary periods. Similarly, the FERS annuity supplement's value is eroded by inflation as it lacks COLAs. Strategic planning, including TSP investments, can help offset these effects.

Final Thoughts

The FERS COLA structure, with its age-62 rule and various exceptions, underscores the need to understand your specific retirement circumstances. Combining this knowledge with comprehensive planning and professional advice will help secure your financial future in retirement.

Frequently Asked Questions

What is the standard eligibility age for FERS COLA?

For most FERS retirees, the standard eligibility age for receiving a Cost-of-Living Adjustment (COLA) on their basic annuity is 62.

Do all FERS retirees receive COLAs at age 62?

While age 62 is the general rule, there are exceptions. Special provision employees (e.g., firefighters) and retirees receiving disability or survivor benefits may be eligible for COLAs sooner.

Does the FERS Annuity Supplement receive a COLA?

No, the FERS Annuity Supplement does not receive COLAs. The payment amount is fixed until it ends, which is typically when the retiree becomes eligible for Social Security at age 62.

If I retire before age 62, do I receive back-dated COLAs when I turn 62?

No, COLAs are not retroactive. The adjustments begin in the year you turn 62, and you will not be compensated for the years your annuity was frozen.

What is the COLA eligibility for FERS disability retirees?

FERS disability retirees are generally eligible for COLAs regardless of age, but there is an exception. If their initial annuity is calculated at 60% of their high-3 salary, they do not receive a COLA during the first 12 months.

Are FERS survivors eligible for COLAs?

Yes, survivors of federal employees and annuitants under FERS, including children and spouses, are eligible for COLAs on their benefits.

How is COLA calculated for FERS retirees?

Unlike the older CSRS, FERS COLA calculations are limited when inflation is higher. For example, if inflation is over 3%, the FERS COLA is 1% less than the actual increase. Consult OPM for the precise annual calculation.