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Is there a cost-of-living adjustment to protect against inflation?

April 26, 2017adjustment cost-of-living inflation protect

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Is there a cost-of-living adjustment to protect against inflation?

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Retirees and survivors who have been receiving an annuity for at least six months may have a cost-of-living adjustment (COLA) applied to their retirement benefit as of each July 1st. It is based on the annualized change in the Consumer Price Index (CPI), as of the preceding December 31st – All Items Annual Average, Urban Index For Major U.S. Cities. The COLA shall be 100% of the CPI change up to 3%, and 50% of any additional CPI changes, with a maximum adjustment of 5% annually. The COLA can result in an increase or decrease in your annuity, but a decrease will never go below your initial benefit.