Department of Defense Announces Cost of Living Increase to Retired Pay

Today, the Department of Defense announced annual cost of living adjustments that will benefit military retirees and survivors during calendar year 2021.  Most military retirees will receive a 1.3 percent increase to their retired pay beginning with the pay they receive on December 31, 2020.  Likewise, survivors of members who died on active or inactive duty, or survivors of military retirees who participated in the Survivor Benefit Plan will, in most cases, see a 1.3 percent increase to their annuities beginning in January.

Survivors who are eligible for the Special Survivor Indemnity Allowance (SSIA) will also receive an increase to their SSIA payments that reflects this 1.3 percent adjustment.  The maximum amount of SSIA payable will be $327 beginning in January, although some survivors may receive less in SSIA as the Department of Defense begins to implement the phased reduction in the Survivor Benefit Plan – Dependency and Indemnity Compensation offset, as enacted by the National Defense Authorization Act for Fiscal Year 2020.

These cost of living adjustments are calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers for the four quarters ending with the third calendar quarter of 2020 (July, August, and September 2020).

Those military retirees who retired during calendar year 2020, and all military retirees who retired under the REDUX retirement system may receive a slightly different annual cost of living adjustment.   The complete list of updates to military retired and retainer pay, and survivor annuities, allowances, and premiums can be found at https://militarypay.defense.gov/Pay/Retirement/Cola.aspx.