military retirement pay and inflation?

Every year congress approves pay raises for the military (usually around 3.5%) to stay in balance with inflation. Does retirement pay stay on par with this? For example, if i was to retire tomorrow after serving 20 years active duty and retire as an E-8, would my 50% retirement pay entitlement stay on par with the CURRENT year's base pay of an E-8 with 20 years in? Like when 2009 or 2010 rolled around, would i still be receiving 50% base pay for that current year's income of an E-8 with 20 years in? Or does it get stuck, and that 50% pay is based off the year you retired in and doesn't increase with inflation? you can receive COLA with retirement pay? that's something i didn't know

Public Comments

1. no bro..it doesn't! we are really not doing it for the money, as you probably know... we do it for each other and for a better world for our kids...at least that is why I have done it this last 20 years..
2. Your retired military pay adjusts somewhat, but not to the same rules that apply to active duty raises. Your COLA pay also adjusts each year, but based on a different measure of inflation than what is used to calculate active duty pay. Basically, it does adjust for inflation, but using an old, arcane equation that no one really knows.
3. ** This is the "pay raise" for retired military - it's a COLA. The amount depends on when the service member retired. The Cost-of-Living Adjustment or COLA is a pay adjustment provided to military retirees and annuitants that helps maintain purchasing power. The adjustment is based on a 12 months average increase in the cost of a market basket of non-discretionary Goods and Services, as measured by the Consumer Price Index for Urban Wage and Clerical Workers. COLAs for Retired Pay The retired pay COLA for those who first became a member of a Uniformed Service before September 8, 1980, is specified according to the effective date of the active duty basic pay rate used to compute their retired pay as follows: Retired Pay Based on the following: Rate of Pay Effective Percent Increase Before January 1, 2007 2.3 percent January 1 - March 31, 2007 2.3 percent April 1, 2007 2.3 percent The retired pay COLA for those who first became a member of a Uniformed Service on or after September 8, 1980, is specified according to the effective date of their retirement as follows: Before January 1, 2007 2.3 percent January 1 - March 31, 2007 2.3 percent April 1 - June 30, 2007 2.3 percent July 1 - September 30, 2007 .2 percent October 1 - December 31, 2007 0.0 percent The retired pay COLA for those who first became a member of a Uniformed Service on or after August 1, 1986, who elected to receive a career status bonus under the provisions of section 322 of title 37 United States Code is specified according to the date of their retirement as follows: Before January 1, 2007 1.3 percent Jauary 1 - March 31, 2007 1.3 percent April 1 - June 30, 2007 1.3 percent July 1 - September 30, 2007 0.0 percent October 1 - Decenber 31, 2007 0.0 percent ** This is the "pay raise" for retired military - it's a COLA.
4. If you entered the military after 1980. Once your retired pay is calculated at retirement, annual COLA raises are at a set figure. This figure is COL minus 1%. Meaning if COL goes up 4% you get a 3% raise. Then there is a one time adjustment at 65. You get all those 1%s back. Then you continue at COL minus 1%.
5. There is a COLA added on each year. It is identical in percentage to that awarded to Social Security recipients. Not the percentage awarded to the active duty force. I've been on the Retired List since July 1, 1982 with 25 years of service. So, my pension amounted to 62.5% of my active duty pay. In that time my net retired pay has more than doubled.