Hmmm, no Christmas bonus this year, so I hope you weren't planning on it. Each year military retirement pay as well as some civilian government pay is adjusted to meet the increased cost of living. This Cost-of-Living-Adjustment (COLA) is assessed by comparing the 3rd qtr of one year to the previous year's 3rd qtr Consumer Price Index (CPI). With COLA's, Social Security & Supplemental Security Income Benefits try to keep pace with inflation. They realized back in 1973, that some incomes weren't able to keep up with inflation.
They do have a formula that calculates it, but I think it might be similiar to the secret FICO score formula honestly. According to The CPI, numbers dipped below 4 percent in the first two quarters of FY2009 and was still in negative numbers at the end of the fiscal year. Due to the negative CPI in FY2009, there will be no COLA increase for retirees in 2010. The year 2009 is the first time since 1975 that there has been no COLA increase. In the 1979's inflation peaked somewhere around 13%. Economic growth was slow, and actually declined a few years. But just like then, we will survive the ebbs and tides of our economy.
So no increase says too, that there was no big increase in inflation. While the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.3 percent in Octobe, it has decreased 0.2 percent over the last 12 months. The next CPI release is scheduled for December 16, 2009.
Note: The annual Cost-of-Living-Adjustment is NOT in anyway related to the annual military pay raise for active duty and reserve servicemembers.
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