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Military Retirement Pay Increase of 1.6% in 2020

As the cost of living increases, it’s only right that veterans see it reflected in their compensation.

Last December, there was a military retirement pay increase of 2.8 percent. It also affected veterans on disability, who received the same bump in their monthly payouts. In 2020 veterans won’t see quite as much change, but they can expect a pay increase of 1.6 percent

Military Retirement Pay Increase 

Every year, government benefits like military retirement pay and Social Security increase based on economic inflation. While this cost-of-living adjustment (COLA) is automatic by law, the percentage varies and often does not keep pace with the rate of inflation. 

The average cost of living is calculated each year based on the price of things like food, housing, transportation, education, clothing, medical care and more. 

If cost of living doesn’t increase, there isn’t a military retirement adjustment — it’s that simple. So a 1.6 percent bump is good news for Social Security recipients and military retirees (and even better news for those who are taking both). 

However, when it comes to VA compensation, things are a little more complicated. 

VA Compensation Increase 

The Department of Veterans Affairs gives monthly payouts to disabled Veterans, and Veterans with other special circumstances. These are also subject to change annually based on the cost of living. 

But unlike Social Security and military retirement pay, VA disability does not increase automatically; it must be reauthorized every single year, meaning they may not see their rightful boost in compensation. 

“So many Veterans rely on disability compensation payments to make ends meet, and this cost-of-living adjustment means that they will be able to continue to do so,” said House Veterans’ Affairs Committee Chairman Phil Roe, after the 2019 COLA. 

While many Veterans still fight for proper compensation, this 1.6 percent COLA will impact them in 2020, and hopefully help those who struggle to make ends meet. 

Military Retirement Pay Increase: The Numbers

Having trouble calculating your 2020 earnings? 

  • Military retirees: For every $1,000 you currently receive, you’ll be getting $16 more per the COLA. 
  • Disabled veterans: If you are rated at 100% disability, you will see an average increase of $49 a month. 

If you happen to be taking Social Security, you can expect a $12 increase in your monthly paycheck. 

The Exception 

You won’t see much of a military retirement pay increase if you entered the Career Status Bonus (CSB), also known as the redux retirement plan. CSB beneficiaries receive one percent less of every COLA. 

Active Duty Service Members

If you’re currently serving and planning on a full career with the military, you may be wondering: What will my retirement payout look like? 

Click here for a tool by the DoD that calculates it for you, based on your retirement plan, estimated rank and length of service, and more. 

Military Retirement COLA

The take-home for active duty service members changes constantly — so it only makes sense that it changes for military retirees, too. While 1.6 percent may not seem like a lot, it makes a difference for Veterans scraping to get by, and helps line the pocketbooks of everyone else. 

You deserve to feel secure in your well-earned retirement. Let us know what you think about 2020’s COLA. And, if you’re lucky enough not to need it, tell us what you’ll be spending the extra cash on! 

Check out the states that don’t tax your military retirement (and the ones that do). 


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