Remember 1980? Gold hit a then-record of $850 per ounce, a postage stamp cost 15 cents and the average gallon of gas cost $1.03.
Fast forward to the present, and gold is up to $1,663 per ounce. But that's not the only thing that has risen. These days, the price of a stamp is 44 cents. And it is a rare gas station where you get a gallon of gas for below $3.90.
For many retirees on fixed incomes, the effects of inflation would be devastating if not for Cost-of-Living Adjustments (COLAs). COLAs permanently increase your retirement benefit and are based on the cost-of-living index. They are designed to address inflation as it occurs. Eligible New York retirees have been receiving regular COLAs since 2000, when an annual Cost-of-Living Adjustment was enacted in the Empire State.
COLA is at least 1 percent, but not more than 3 percent of the first $18,000 of your Single Life Allowance amount. If your Single Life Allowance is less than $18,000 annually, the calculation is based on the actual amount. For example, if your Single Life Allowance was $16,000, your COLA would be based on $16,000. Once you become eligible and COLA payments begin, they will continue automatically and be effective in the September pension payment. The September 2011 COLA equals 1.4 percent.
Q: Who is eligible to receive COLAs?
A: To begin receiving COLA payments, you must be:
n Age 62 or older and retired for five or more years;
Age 55 or older and retired for ten or more years;
A disability retiree receiving a pension for five years;
The spouse of a deceased retiree receiving a lifetime benefit under an option elected by the retiree at retirement. (An eligible spouse is entitled to one-half the COLA amount that would have been paid to the retiree when the retiree would have met the eligibility criteria); or
A beneficiary receiving the accidental death benefit for five or more years on behalf of a deceased Employees' Retirement System member.
If you are eligible, you will receive a letter indicating how much you will be receiving prior to your September pension payment. Those who become eligible after September will begin receiving the COLA in the month following when they become eligible.
Q: How is the COLA increase determined?
A: The COLA percentage equals 50 percent of the annual rate of inflation, measured at the end of the state's fiscal year (March 31). This year, the maximum COLA will be $252, or $21 per month before taxes.
Q: How can I get help if I need it?
A: To learn more about COLA, read our publication, Permanent COLA, at www.osc.state.ny.us/retire/publications/vo1863.htm or go to www.osc.state.ny.us/retire/retirees/cost_of_living_adjustment.htm.