Inflation has been a hot topic for 2022, and its ramifications look poised to continue into the new year. The good news is that a 2023 military retiree pay raise is on course to become the largest increase since 1981. But the other side of the coin is that because of inflation, this increase won’t elevate your bank account or purchasing power like you might think. Learn more about what the military retirement pay raise 2023 has in store, including increases for Veterans with disabilities.
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What Is the Military Retiree Pay Raise for 2023?
The 2023 military retiree pay raise will provide an increase of 8.7% for disabled Veterans and military retirees. This increase is a notable departure from the average of the last decade of 1.9% and even more than the 5.9% increase of 2022.
The culprit? Inflation. This increase to the federal Cost of Living Allowance (COLA) was announced by the Social Security Administration in October 2022 as a way to combat the decrease in purchasing power Veterans and all communities are facing.
Retired military members can expect $87 more for every $1,000 of military retirement pension received per month. If you are a retired Veteran that began your military career on or after August 1, 1986, and have chosen the Career Status Bonus (CSB/Redux retirement plan), any COLA increases are reduced by 1%. This equates to an increase of $77 per $1,000 received in 2023.
For service members that retired from serving in 2022, a reduced COLA in 2023 can be expected. You’ll be provided a prorated version, which coordinates with the quarter you retire in. Your rate is based on when you entered the military and the retirement plan you’ve chosen.
In the same way that retirees’ payments will increase, Survivor Benefit Plan payments will increase at the same rate. By law, most government disability and retirement payments increase each year, but inflation is making exceptions come to life.
VA Disability COLA 2023
The 2023 VA disability pay chart and increases for this segment of the community are important considerations. Here’s what disabled Veterans can expect as part of the 2023 military retirement pay raise:
- Average VA disability checks are increasing between figures that fall between an estimated $13.28 per month (10% rating) and $289.89 per month (100% rating). The total amount for your 2023 Veterans disability compensation rates depends on household factors as well as your VA disability rating.
- Dependency and Indemnity Compensation (DIC) benefits for surviving spouses of disabled Veterans are seeing an increase, too. This means an increase to $1,562.74 for 2023, with additional amounts also receiving an 8.7% raise.
- The 8.7% increase in Social Security checks will also be granted to retirees and Social Security recipients.
Will the 2023 Military Retiree Pay Raise Be Enough To Fight Inflation?
You’d be hard-pressed to find anyone not willing to take a pay raise. That’s not really the issue here. But considering the economic pressures that persist, including many experts expecting bleak economic conditions to start off 2023, are these increases going to be enough to make a difference?
Financial mismanagement is already a problem within the Veteran community, with a heavy influence being the lack of experience and/or resources that bolster financial literacy leading up to and during service in the military.
Money problems are a common theme for many households doing what they can to stay afloat during historic inflation. Hopefully, the 2023 military retiree pay raise will be a helpful tool to keep Veteran households out of trouble as we all look for a long-term solution to improve the nation’s economic prospects.
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