From The Mailbag: Overseas Retiree Wonders About COLA

The transition from active duty to retiree is full of changes, including pay changes.  Knowing what you will receive helps eliminate surprises.

Kate:

Just retired this past Dec 31……Ireceived my first retired check and have the LES for my Feb one, but I don’t see any COLA payment on any of them……Iretired at Puerto Rico , which is a OCONUS place…..Is this a COLA payment location???????

One of the thing that surprises many retirees is how much less they receive in overall pay.  Not only is their pay decreased, but they are no longer entitled to allowances such as Basic Allowance for Housing and Basic Allowance for subsistence.

Dear Mr. Garcia,

Retired service members receive only their retirement pay, not any allowances that are paid to active duty service members.  These allowances include Basic Allowance for Housing (BAH), Basic Allowance for Subsistence (BAS), and Cost of Living Allowance (COLA.)

You will, however, receive a Cost of Living Adjustment (COLA) each year that they are authorized.  These adjustments occur in December and are reflected in the January payments.

Hope that helps,

Kate

The more you know, the more prepared you can be!

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.