Retirement is something that most federal employees look forward to after years of hard work and dedication to their job. However, in recent years, the federal government has been reconsidering the retirement benefits that it offers to its retirees, and that includes the possibility of giving retirees a raise in 2023. This raises the question – will federal retirees receive a raise in 2023?
The answer to this question is complicated, as any potential changes to the federal retirement system could take years to implement. Currently, the federal government has not yet made any official announcements on the matter, so it’s impossible to say for sure if federal retirees will get a raise in 2023. However, there are some factors that could potentially influence the decision.
The Cost of Living Adjustment
One of the most important factors to consider when discussing the possibility of a raise for federal retirees is the cost of living adjustment (COLA). This is an annual adjustment to the federal retirement benefits that takes into account the cost of living in the United States. It is calculated by the Bureau of Labor Statistics and is based on the Consumer Price Index (CPI). If the CPI rises, then federal retirees will receive a cost of living adjustment, which could result in a raise.
The most recent cost of living adjustment was in 2020, when federal retirees received a 1.6% raise. This was the highest COLA increase in more than a decade, and it was due to the fact that the CPI increased significantly in 2019. It is possible that the CPI could continue to rise in 2021 and 2022, and if that happens, then federal retirees could receive a raise in 2023.
The Federal Retirement Thrift Investment Board
Another factor to consider when discussing the possibility of a raise for federal retirees is the Federal Retirement Thrift Investment Board (FRTIB). This is the government agency responsible for managing the Thrift Savings Plan (TSP), which is the retirement savings plan for federal employees. The FRTIB has the authority to increase the contribution limits for TSP, which could result in a raise for federal retirees.
The FRTIB is currently considering a proposal to increase the contribution limit for TSP from $19,500 per year to $26,000 per year. If the proposal is approved, it could result in a significant increase in the retirement benefits for federal retirees, as they would be able to save more money for retirement. This could potentially lead to a raise in 2023.
The Future of Social Security
Finally, it’s important to consider the future of Social Security when discussing the possibility of a raise for federal retirees. Social Security is the primary source of income for most retirees, and any changes to the program could have a significant impact on their retirement benefits. Unfortunately, Social Security is facing a funding crisis, and Congress is currently debating potential solutions.
If Congress is able to pass legislation to address the Social Security crisis, it could have a positive impact on federal retirees. For example, if the Social Security retirement age is raised or the cost of living adjustments are increased, then federal retirees could see a raise in 2023.
Conclusion
At this point, it’s impossible to say for sure if federal retirees will get a raise in 2023. The answer will depend on a variety of factors, including the cost of living adjustment, the decisions of the Federal Retirement Thrift Investment Board, and the future of Social Security. Until the federal government makes an official announcement, all we can do is wait and see.