In Oct. it was announced by the Social Security Administration that there would be a 5.9% increase for the COLA adjustment in 2022.
The last time it increased that much was almost 40 years ago.
These changes have pushed people to call on lawmakers to make federal worker’s retirement systems equal.
The Social Security COLA is determined by seeing inflation and changes in the third quarter consumer price index.
The Civil Service Retirement System, which is the federal government’s retirement system, calculates their member’s annual annuity the same way. This means there will be a 5.9% increase for CSRS workers as well.
What some of these changes mean
As the COLA is increased for Social Security beneficiaries by 5.9%, so is the payroll tax on Social Security at 6.2% for earnings up to $147,000.
Related: Here are five major Social Security changes happening next month, including a larger payment
Federal Employees Retirement System employees only pay the civil service retirement contribution.
CSRS Offset employees will continue to pay the 7% they have been, which is 6.2% for Social Security and .8% to the federal retirement fund.
Full CSRS employees don’t pay tax for Social Security.
While the CSRS employees will see a 5.9% increase in COLA, the FERS employees are only seeing a 4.9% increase.
If the adjustment is between 2% and 3%, then FERS only get a 2% increase.