OPM COLA 2025: As federal workers and retirees think about 2025, conversations about the next cost-of-living adjustment (COLA) are picking up speed.
Based on early estimates, federal payments may go up by a small amount, anywhere from 1.75 percent to 2.5 percent. The goal of this change is to lessen the effects of rising prices caused by inflation.
Based on recent trends in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which showed a 2.9% rise as of January 2024, the Senior Citizens League (TSCL) thinks that the COLA will be around 1.75 percent in 2025.
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The Congressional Budget Office (CBO), on the other hand, thinks that the change will be 2.5%, which is an optimistic estimate.
OPM COLA 2025: Recent pay raises and efforts to pass laws
These last few years have seen big pay raises for federal workers: 4.6% in 2023 and 5.2% in 2024. These are some of the biggest raises in over twenty years. Some people are still not sure if these raises are enough to keep up with the cost of living, though.
Because of this, the Federal Adjustment of Income Rates Act (FAIR Act) has been brought up in Congress. It says that federal workers should get an 8.4% pay raise in 2025. The bill’s goal is to close the pay gap between people who work for the government and people who work for private companies.
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The Social Security Administration (SSA) will likely release the official COLA in the middle of October 2024. This will set the final percentage increase based on changes in average prices during the third quarter of the year. While they wait for these updates, many federal workers are hoping for a COLA that really takes into account the tough economic times they are living through.
In conclusion, early estimates for the 2025 COLA point to a small rise, but the exact numbers will depend on new economic reports. Federal employees should stay up to date on these changes so that they can better plan their finances for the coming year.
