Military Retirement COLA 2024: How It Works, How Much It Is, and How to Prepare for It

If you’re a military retiree, you probably know that the government adjusts your annuity every year to keep up with inflation. The government calls this adjustment the cost-of-living allowance (COLA), and it bases it on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

The government will determine the COLA for 2024 based on the average change in the CPI-W from the third quarter of 2023 to the third quarter of 2024.

A picture showing a veteran holding some notes of cash depicting COLA scheme | Photo courtesy: Getty images
The COLA is a valuable benefit that helps you enjoy your retirement without worrying about inflation | Photo courtesy: Getty images

But how much will the COLA be in 2024? And how will it affect your monthly income? Here’s what you need to know.

2024 cola estimate

According to the Senior Citizens League, a nonpartisan advocacy group that tracks the COLA, the estimated increase for 2024 is 2.7%.

The government announced the inflation rate of 4.9% in April 2023.

However, keep in mind that this is just an estimate, and they will announce the actual COLA in October 2024, once they have the final CPI-W data.

If the prediction is accurate, the COLA for 2024 will be much lower than the previous two years.

In 2023, the COLA was a whopping 8.7%, the highest in four decades. In 2022, it was 5.9%, the highest since 2009. These high COLAs were driven by the surge in inflation caused by the COVID-19 pandemic and its impact on the economy.

However, a lower cost-of-living allowance is not necessarily bad news. It means that inflation is slowing down and prices are stabilizing.

A picture of an elderly counting some cash in his hand | Photo courtesy: Getty images
The VA adjusts the disability rates every year based on the cost-of-living adjustment (COLA) set by Congress | Photo courtesy: Getty images

Something to note; a high inflation rate erodes your purchasing power and makes your money worth less. A low inflation rate preserves your buying power and makes your money worth more.

RELATED: VA Disability Pay Chart 2024: Your Monthly Payment Amount

What Is COLA In Salary

The COLA affects not only military retirees, but also veterans, Social Security beneficiaries, and other federal annuitants.

The cost-of-living allowance is applied to your base pay, which is determined by your rank, years of service, and retirement plan. The higher your base pay, the higher your COLA.

Let me take you on how the COLA works, let’s use an example. Suppose you retired as an E-7 with 20 years of service under the High-36 retirement plan. Your base pay in 2023 was $2,869.30 per month. If the COLA for 2024 is 2.7%, your new base pay will be $2,946.64 per month, an increase of $77.34. Over a year, that’s an extra $928.08 in your pocket.

Of course, this is just an example and your actual income may vary depending on your personal situation.

You may also have other sources of income, such as VA disability compensation, Social Security benefits, or a second career. The cost-of-living allowance will also apply to these payments, as long as they are eligible.

How to Prepare for the COLA

The COLA is designed to help you maintain your standard of living in the face of inflation. However, it may not always match your personal expenses or needs.

Some costs may rise faster than others, such as health care, housing, or food. Some costs may be fixed or reduced, such as taxes, insurance, or debt.

Therefore, it’s important to plan ahead and budget accordingly. Here are some tips to help you prepare for the it:

  • Review your income and expenses regularly and adjust them as needed.
  • Save some of your extra income for emergencies or future goals.
  • Invest some of your extra income for long-term growth and security.
  • Spend some of your extra income on things that make you happy and healthy.
  • Seek professional advice from a financial planner or counselor if you need help.


The COLA is a valuable benefit that helps you enjoy your retirement without worrying about inflation.

By staying informed and prepared, you can make the most of it and live comfortably on your military pension.

If you enjoyed this article and want to learn more about the disability insurance, don’t forget to check out our website for more interesting and informative content.

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