A Washington, D.C., area lawmaker last week filed legislation that would standardize the annual increase in annuity payments that retired federal employees receive across retirement systems.

The Equal COLA Act (H.R. 304), introduced by Rep. Gerry Connolly, D-Va., would ensure that federal retirees in the Federal Employee Retirement System and the Civil Service Retirement System both receive the same annual percentage cost of living increase each year.

Under the current rules, which date back to 1986, the CSRS methodology for calculating cost of living adjustments is tied to the annual change in the third quarter consumer price index for workers. But FERS COLAs are based on an extrapolation from the CSRS adjustment: if the CSRS sees an increase of under 2%, FERS retirees will receive the full COLA. If the adjustment is between 2% and 3%, FERS enrollees would only receive a 2% increase. And if the CSRS COLA is 3% or more, FERS retirees would receive that adjustment, minus 1 percentage point.

Connolly’s bill, which he last introduced in 2018, would tie both systems’ annual increase directly to the CPI-W. The prospects for success seem brighter in this session of Congress, with Democrats controlling both chambers. President-elect Biden also vowed to the National Active and Retired Federal Employees Association last year that he would push for retiree cost of living adjustments to be based on the more generous consumer price index for the elderly.

Elsewhere on Capitol Hill, a bipartisan pair of House lawmakers have introduced a bill that would double the cash bonus available to federal employees who identify wasteful spending at their agencies.

The Bonuses for Cost-Cutters Act of 2021 (H.R. 103), introduced by Reps. Chuck Fleischmann, R-Tenn., and Jim Cooper, D-Tenn., would increase the maximum reward for feds who successfully identify wasteful spending to 1% of the amount saved, up to $20,000.

Under the bill, agency heads would be able to grant the cash bonus to federal workers if the agency chief financial officer or other designated official determines the spending is unnecessary. Employees of offices of the inspector general and Senate-confirmed political appointees are ineligible for the benefit.

“In the private sector, employees work hard to identify ways to save their organization money and they are often rewarded for their diligence,” Fleischmann said in a statement. “It doesn’t make sense that federal agencies are encouraged to spend, spend, spend instead of being rewarded for working to save taxpayer dollars and reduce our national debt.”

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By the end of November, the Office of Personnel Management’s backlog of retirement claims in need of processing was more than 20,000 after taking a slight dip over the last seven months of the COVIC-19 pandemic, according to the agency’s latest numbers.

The claims inventory stood at 20,022 last month, up from 19,605 in October and having remained between 17,000 and 19,000 between the months of April and September.

OPM received 5,876 applications for retirement last month, compared to 8,323 in October and having received an average of 6,000 claims per month from March through September.

It processed 5,459 claims in November, which is down from 6,992 the month prior and significantly less than the 8,931 claims it processed in March at the start of the COVID-19 pandemic.

The agency took an average of 76 days to process claims last month, which is comparable to the number of days it took to process a claim throughout the pandemic, but more than the average of 59 days in February, before the pandemic.

The figures come from OPM’s monthly claims processing progress report available on the OPM website.

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There’s no such things as the perfect age to sign up for Social Security. You get an eight-year window to claim benefits that begins at 62 and ends at 70, financially speaking, and each age within that window has its pros and cons.

Now it just so happens that 62 is the most popular age to sign up for Social Security, but it also comes with consequences. You’re entitled to your full monthly benefit based on your wage history once you reach full retirement age, or FRA. That age is either 66, 67, or somewhere in between those two ages, depending on your year of birth.

If you claim Social Security at 62 with an FRA of 66, you’ll shrink your monthly benefit by 25%. And with an FRA of 67, you’re looking at a 30% reduction by filing at 62. But despite that tremendous hit to your retirement income, here’s why it could pay to land on 62 as your Social Security filing age.

1. You’ll get to retire sooner

Many people dream of early retirement. If you’ve spent the bulk of your career at a grueling job, you may want nothing more than to leave the workforce on the early side. And while you’ll generally need a healthy level of retirement savings to make that possible, claiming Social Security could provide the financial push you need to feel comfortable ending your career a bit sooner than most.

2. You have to retire sooner

An estimated 48% of workers are forced to retire earlier than planned, according to the Employee Benefit Research Institute, and the COVID-19 outbreak — and unemployment crisis it’s produced — could drive that percentage up even higher. These days, a lot of older Americans are out of work, and those struggling to return to a job may have no choice but to retire ahead of schedule instead. Furthermore, some older workers may be voluntarily leaving their jobs due to health concerns, and it’s these same people who are apt to need an income source like Social Security once their paychecks go away.

But even outside of the pandemic, it’s clear that early retirement often isn’t a choice, but rather, a side effect of unwanted circumstances. Older workers get pushed out of jobs all the time to make room for younger, less expensive employees, and health issues can make continuing to work impossible. If that’s the scenario you’re in, whether it’s related to COVID-19 or not, you may have to claim Social Security at 62 so you can pay your bills. And to be clear, that’s a much better option than racking up debt just to exist.

3. You’re not willing to take chances

Technically, Social Security is designed to pay you the same total lifetime benefit regardless of when you file. The logic is that while filing early lowers your monthly benefit, you collect benefits for a greater number of months. When you file on time or even after FRA, you grow your benefit, but collect fewer individual monthly payments. You should therefore, in theory, break even if you live an average lifespan.

But what if you don’t? Even if your health is great at age 62, you never know when a medical issue might pop up out of nowhere that suddenly shortens your lifespan. And if you’re unlikely to live an average life expectancy, you’re better off claiming Social Security early, as that will result in a greater amount of money in your lifetime.

Though claiming Social Security at 62 isn’t the right choice for everyone, it may be the best bet for you. Weigh the pros and cons, and with any luck, you’ll land on a solid choice.

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