A Perfect Retirement Storm? Comparing Pay Raise, Inflation, COLAs During Periods of High Inflation

Recent Data for Inflation, Pay Raise, and COLAs

We cannot be certain what the pay raise will be in 2023. With President Biden issuing his “alternative pay plan” letter last week, it appears the 2023 raise will be an average of 4.6%. This is an across-the-board pay raise of 4.1% and an additional amount of 0.5% for different locality pay raise amounts throughout the country.

Inflation is at the highest it has been in 40 years. The method of calculating inflation has changed. The actual inflation rate today would probably be higher if the calculation procedures had not changed.

Inflation Under Presidents Carter and Biden

There are two presidents who were in office when inflation has soared: President Jimmy Carter and President Joseph Biden.
Comparing the annual COLA rates, pay raise rates, and annual inflation in two disparate administrations about four decades apart may provide some insight into P federal employees and retirees fared in periods of high inflation. Click HERE to read more.