Here's Your 2021 Military Retiree and VA Disability Pay Raise

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Military retirees, those who receive disability or other benefits from the Department of Veterans Affairs, federal retirees and Social Security recipients will see a 1.3% increase in their monthly checks for 2021.

The annual Cost Of Living Allowance (COLA) is slightly less than the 1.6% increase from last year but in line with the historical increases seen over the last 10 years.

Each year, military retirement pay, Survivor Benefit Plan Annuities, VA Compensation and Pensions, and Social Security benefits are adjusted for the rate of inflation.

Military retirement pay is one of the top three benefits of military service, along with medical and other benefits. Understanding how to calculate military retirement pay involves understanding the final pay and high 36-month average methods.

Retirement Pay Increase

As a result of the increase, retired military members will see a $13 increase for each $1,000 in military retirement pension they receive each month.

Retirees who entered military service on or after Aug. 1, 1986, and opted for the Career Status Bonus (CSB/Redux retirement plan) have any COLA increases reduced by 1%, so they will see a smaller increase in 2021. They should see a monthly increase of only $3 per $1,000.

Survivors receiving Survivor Benefit Plan payments will see the same increase of $13 per $1,000 in their monthly payments.

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VA Disability Increase

Disabled veterans will also get a bump. The average VA disability check will go up about $1.85 per month for those with a 10% rating, and $19.68 for those rated at 100%.

Related: See the current VA disability compensation rates.

Other Federal Retirees and Beneficiaries

Military retirees and VA beneficiaries aren't the only ones who benefit from the COLA increase. Civil Service retirees and Social Security recipients will also see the 1.3% jump in their monthly checks.

For Social Security recipients, the monthly increase will mean an extra $18.07 per month for the average beneficiary.

How the COLA Is Determined

The Department of Labor determines the annual COLA by measuring the Consumer Price Index (CPI), which is a measurement of a broad sampling of the cost of consumer goods and expenses. The CPI is compared to the previous year; if there is an increase, there is a COLA. If there is no increase, there is no COLA.

The COLA affects about one in every five Americans, including Social Security recipients, disabled veterans, federal retirees and retired military members.

In 2020, the COLA increase was 1.6%; in 2019, retirees saw a 2.8% increase.

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