HOW BIG IS THE RETIRED MILITARY PAY RAISE IN 2022?
By Kevin Lankes
When a new year comes around, the cost of living adjustments (COLA) come with it. And this year’s retired military pay raise in 2022 is the biggest raise Veterans have seen in decades, amounting to a 5.9% increase. With all the news about rising tensions in Eastern Europe, this is something that Veterans, their families, and survivors can get excited about.
Suggested read: How the Military Pay Raise 2022 Affects Your Salary
Retired Military Pay Raise 2022In 2022, runaway inflation contributed to the big increase in this year’s COLA, which will hopefully put consumers in the military community at ease as they face out-of-control cost increases and further supply chain snafus. Across the board, retired and disabled Veterans will be getting a 5.9% retired military pay raise. Not only is a pay raise coming for military retirees, but it’s also the biggest increase in pay since 1982. On average, annual COLA increases have been just 1.5% for the entirety of the last decade. At that rate, this year’s raise amounts to a handful of annual raises all at once.
What Is the 2022 COLA for Military Retirees?The COLA in 2022 is 5.9%, which amounts to $10-$90 per month. Another way to look at the numbers is to expect an additional $59 for every $1,000 of military retirement pension received each month. Survivors of retired military personnel will also see the Survivors Benefit Plan increase 5.9%. Eligible survivors will also see their Special Survivor Indemnity Allowance (SSIA) increase by the same percentage. The highest possible payment from SSIA in 2022 is $346. COLA is calculated by factoring in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). That number is followed across a range of time constituting the third quarter of the previous year to the third quarter of the current year. The Bureau of Labor Statistics in the Department of Labor is responsible for measuring the CPI-W.
How Much Will Retired Military Pay Increase in 2022?Veterans will see their COLA kick up their pay somewhere between $10-$90 per month. The purpose of this year’s COLA, as with every year, is to fight the increase in inflation and protect the spending power of retired and disabled service members and their families. Very simply, if the fixed income of a retired or disabled service member or their survivors is not enough to live on in the current economic climate or if products and services are climbing in cost while military retirement pay raises aren’t keeping up, then you can expect a decent COLA raise in the near term to counteract those rising costs.
VA Disability Rates Will Also IncreaseThe Social Security Administration announced the increase in October of 2021, to take effect on January 1, 2022. The law requires the VA to raise disability payments by the same amount, and the military generally provides an equal raise in military retirement pay. In terms of VA disability rates, 2022 will shell out an extra $8.50 each month based on an individual’s total disability rating. That means that someone with a 10% disability rating starts at an additional $8.50, but someone with a disability rating of 80% would receive $68 more than in the past. The total monthly rate for those two individuals would come to $152.64 and $1,778.43, respectively. The full VA disability rates for 2022 can be found here. Certain military members will not see the total retired military pay raise in 2022 due to a variety of circumstances. Any Veteran who opted to retire under the REDUX system and who entered the military on August 1, 1986, or after, for instance, will see a 1% decrease in their total COLA, as will some military retirees who left the service during 2021. Overall, though, if you’re like most U.S. Veterans and their families, your military retirement pay raise will be a huge boon to the security of your financial future.
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