What is the 2023 FERS COLA for Federal Retirees?


In response to runaway inflation, the federal government will increase benefits for retirees under the Federal Employees Retirement System (FERS) by 7.7 percent in 2023.

Retired federal civilian employees covered by the Civil Service Retirement System (CSRS) will see an 8.7 cost-of-living adjustment, and social security benefits will increase by the same margin.

If you’re among the millions of retired federal workers covered by these programs, you’re probably wondering how this will affect your FERS retirement benefits.

This guide will answer all your questions about the 2023 FERS COLA, including how the COLA is calculated, the differences between FERS and CSRS, and other important info. fe

The Largest FERS Increase in 40 Years

The federal government adjusts FERS benefits annually to ensure retirement benefits keep pace with inflation. In 2022, prices have surged across the board, with significant increases in several categories of essential goods, including utilities, food, and rent. 

To ensure retirees can afford basic necessities, the federal government has approved the largest COLA in four decades. 

Economic analysts forecast global inflation for 2022 will average nearly 9 percent. However, according to the International Monetary Fund, consumers will likely get some relief in the coming years, as global inflation is expected to drop to 6.5 percent by 2023 and to 4.1 percent by 2024.  

Not Everyone Will Receive a FERS COLA Bump

Retirees under the Federal Employees Retirement System younger than 62 on Dec. 1, 2022, will not receive a COLA this year. However, you will receive a COLA if you are younger than 62 if you belong to one of the following groups:

  • FERS disability annuitants 
  • People retiring under provisions for special classes of federal employees, such as law enforcement officers, firefighters, and air traffic controllers 
  • Spouses, former spouses, and insurable interest survivor annuitants

How is the FERS COLA calculated?

The United States Department of Labor determines the COLA each year by comparing the Consumer Price Index in the current year’s third quarter with the same period of the previous year. 

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) sets the COLA for the Federal Employees Retirement System, the Civil Service Retirement System, and Social Security benefits.  The CPI-W is a sub-index of the Consumer Price Index that looks at the spending of white-collar workers in cities.

The 2023 CPI-W baseline is the average of the CPI-W for July, August, and September 2022. The baseline for FY 2023 is ​​291.901, which is an 8.7 percent increase over the 2022 baseline of 268.421.

Why is the FERS COLA Only 7.7 Percent?

Though the COLAs for the Federal Employees Retirement System (FERS) and the Civil Service Retirement System (CSRS) are both based on the CSRS, the two won’t necessarily increase by the same percentage. 

CSRS retirement and social security benefits directly track the Consumer Price Index for Urban Wage Earners and Clerical Workers. Still, the FERS COLA is derived from the CSRS COLA based on the following formula.

If the CSRS COLA is:

  • Less than 2 percent, then the FERS COLA is the same
  • 2 to 3 percent, then the FERS COLA is 2 percent.
  • Above 3 percent, the FERS COLA equals the CSRS COLA minus 1 percent.

Since the CSRS COLA is 8.7 percent in 2023, the third condition applies. The FERS COLA for 2023 is 8.7 percent minus 1 percent. The FERS adjustment is usually lower because the FERS benefit comes from three different sources. 


There are two retirement systems for federal civilian employees: The Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS). The CSRS is the original retirement plan Congress created in 1920. FERS retirement was established in 1986 and went into effect on Jan. 1, 1987.

All new federal civilian employees are enrolled in the Federal Employees Retirement System, and federal workers who started under the CSRS were allowed to opt into FERS. However, some retired federal workers still receive annuity payments under the legacy CSRS system.

The Federal Employees Retirement System will be the sole federal retirement plan once there are no longer any living CSRS beneficiaries, including federal retirees and those eligible for survivor benefits.  

How Do FERS and CSRS Benefits Differ?

When Congress created the CSRS, it was intended to function as a traditional pension plan with regular payroll deductions. When federal workers retired, they would receive an annuity with sufficient cost-of-living adjustments to maintain the same quality of life they enjoyed while working. 

After 30 years of working for the federal government, a federal employee with retirement coverage under CSRS should be able to live a comfortable life on annuity payments alone, even without social security. The Federal Employee Retirement System works differently. FERS retirement benefits come from three different sources:

  • Basic Benefit Plan
  • Social Security
  • Thrift Savings Plan

The Basic Benefit Plan works like a normal pension with routine payroll deductions. The agency withholds a portion of your income for your basic benefit and social security. Benefits under the Basic Benefit Plan are lower than a CSRS pension, but it isn’t intended to completely cover your retirement. 

The Thrift Savings Plan is the federal government equivalent of a 401(k) retirement savings plan. All new federal civilian employees will automatically receive a Thrift Savings Plan account. The agency pays 1 percent of an employee’s income each pay period into the Thrift Savings Plan account. 

Federal employees can make their own contributions, and the agency will pay a matching amount. Contributions to the Thrift Savings Plan are tax-advantaged and administered by the Federal Retirement Thrift Investment Board. The Thrift Savings Plan and Social Security parts of your retirement are transferrable to your next job if you leave the federal service.

Eligibility and Minimum Retirement Age

A federal employee’s age determines FERS eligibility and years spent working for the federal government. To receive retirement benefits in some cases, you must meet the Minimum Retirement Age. Consult the following table to determine your Minimum Retirement Age:

If you were bornYour MRA is
Before 194855
In 194855 and 2 months
In 194955 and 4 months
In 195055 and 6 months
In 195155 and 8 months
In 195255 and 10 months
In 1953-196456
In 196556 and 2 months
In 196656 and 4 months
In 196756 and 6 months
In 196856 and 8 months
In 196956 and 10 months
In 1970 and after57

Immediate Retirement Benefit

To receive annuity payments 30 days after your retirement, you must meet the following conditions:

AgeYears of Service

Federal workers who retire at the Minimum Retirement Age with more than ten years of federal service and less than 30 will receive a 5 percent deduction in retirement benefits for each year under 62. If you have 20 or more years of service, you are eligible for immediate retirement benefits at age 60.

Early Retirement

In certain situations, the Office of Personnel Management may authorize agencies to lower the retirement age to encourage people to retire early and reduce staffing costs. To be eligible for early retirement, you must have worked for 20 years if you are over 50. You may qualify for early retirement at any age if you’ve been on the job for 25 years or more.

Suppose you don’t meet the age and years of service requirements needed to receive an immediate retirement benefit under the above conditions. In that case, you might qualify for deferred retirement reduced benefits until you hit the MRA.


Retired federal employees will get a 7.7 percent cost-of-living adjustment in 2023 based on an 8.7 annual increase in the CPI-W for the third quarter of 2022. To receive the cost-of-living adjustment, you must be over the minimum retirement age of 62 on Dec. 1, 2022.

If you are unsure whether you will get a COLA increase this year, consult the federal Office of Personnel Management website for more information. 

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  1. I worked 33 years why am I not getting COLA at age 58?? Just because I starting working at a younger age I shouldn’t get penalized

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