If you're a Plan 1 member of the Public Employees' Retirement System (PERS) or Teachers' Retirement System (TRS), you can choose to reduce your initial benefit and receive an annual cost-of-living adjustment. This adjustment is called an Optional COLA and is based on the Consumer Price Index (CPI).1 The Optional COLA was created by the legislature in 1987.
If you're interested in comparing your benefit with and without the Optional COLA, please try our Optional COLA Calculator. The calculator uses Microsoft Excel Version 97-2003 or later.
The calculator provides a simple estimate that does not include a comparison of potential interest (for example, if you didn't elect the Optional COLA, and instead invested the difference between the monthly benefits). The calculator also doesn't include the other COLAs you may be eligible for or the complexity of COLA Banking. You may want to consider these as you make your decision. For some, talking with a financial planner will be helpful.
If you have questions about the Optional COLA, visit our Optional COLA Frequently Asked Questions. If you don't have Microsoft Excel, but want to use the calculator, we have staff available to help. Contact us for help creating or interpreting the calculator's results.
After you enter your information and assumption about what will happen with inflation, the calculator displays your monthly and cumulative benefit at three milestones:
|Initial retirement benefit||You can compare your benefit with or without the Optional COLA when you first retire.|
|Monthly benefits equalize||Optional COLA benefits start out lower and grow based on inflation. The calculator highlights how old you will be when the Optional COLA monthly benefit "catches up" with the monthly benefit amount you would have received if you had not elected the Optional COLA.|
|Cumulative benefits equalize||The calculator highlights how old you will be when the Optional COLA cumulative benefit "catches up" with the cumulative benefit amount you would have received if you had not elected the Optional COLA.|
DRS would like to include your feedback as we consider future enhancements to the Optional COLA Calculator. We would also appreciate your input on the Frequently Asked Questions. To provide feedback, please contact us.
1 The Optional COLA's maximum CPI adjustment is three percent annually.