We can expect a smaller COLA increase for 2021. The final number will be released on October 13^th.  The August issue of Kiplinger magazine estimated an increase of 1.2% while others suggest a much lower figure of .44%. Both projections are much lower than the 1.6% we received last year.

Projected COLA Going Down

The Social Security Act specifies a formula for determining each COLA. According to the formula, COLAs are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-Ws are calculated on a monthly basis by the Bureau of Labor Statistics.

According to the Socials Security Administration, a COLA effective for December of the current year is equal to the percentage increase (if any) in the CPI-W from the average for the third quarter of the current year to the average for the third quarter of the last year in which a COLA became effective. The fourth quarter isn’t used to determine the upcoming year’s COLA because that number isn’t available from the Bureau of Labor Statistics until mid to late January. Our COLAs are adjusted on January 1 before the 4^th quarter data is available.

2020 Health Care Open Season (2021 Coverage and Premiums)

The 2020 Federal Employees Health Benefits (FEHB) open season will run from November 9 through December 14, 2020.  Each year Open Season runs from the Monday of the second full workweek in November through the Monday of the second full workweek in December. Health care service providers are required to submit benefit and rate proposals for the contract term beginning January 1, 2021 on or before May 31, 2020. OPM generally completes negotiations in August so we should have updates and new rates in Early October. When they are published, I will send out a message to all subscribers.

During the annual Open Season, eligible employees can enroll, change plans or plan options, change enrollment type, or cancel their enrollment for FEDVIP and the FEHB Program. Employees can also re-enroll or newly enroll in FSAFEDS.

We will have 10 new plan options in FEDVIP for a total of 23 dental plan options and 10 vision plan options in 2021.  More information on the new plans will be released shortly by OPM.

OPM encourages all carriers to thoroughly evaluate options every year with a focus on improving affordability, reducing costs, improving the quality of care, and protecting the health of their enrolled populations. Any proposed benefit enhancements must be offset by proposed reductions so that premiums are not increased due to benefit changes. Premium increases are inevitable for most participants again this year and some anticipate they will increase significantly due to the COVID-19 pandemic. Last year the average rate increase was 4%.

Retirees can connect to FEHB Open Season Online to review brochures, pricing and submit changes starting in early November. You can actually chat with a Customer Service Representative using their “Live Help” feature.

Since many federal employees have been working from home due to the pandemic, OPM and your agency HR office is working on ways to get plan information to you expeditiously.

Request a Federal Retirement Report

Retirement planning specialists provide a comprehensive Federal Retirement Report™ including annuity projections, expenditures verses income, with a complete benefits analysis. This comprehensive 27-page benefits summary will help you plan your retirement.

Request Your Personalized Federal Retirement Report™ Today

Find answers to your questions: The best time to retire, retirement income vs expenditures, FEGLI options and costs, TSP risks and withdrawal strategies, and other relevant topics. Determine what benefits to carry into retirement and their advantages. You will also have the opportunity to set up a personal one-on-one meeting with a CERTIFIED FINANCIAL PLANNER.

Helpful Retirement Planning Tools

• Retirement Planning For Federal Employees & Annuitant
• Budget Work Sheet
• A Marriage of Convenience – Medicare & FEHB
• Medicare and FEHB Options – What Will You Do When You Turn 65? (Part 1)
• What to Consider Before Enrolling in Medicare B (Part 2)
• Should You Change to a Lower Cost FEHB Plan When You Sign Up For Medicare (Part 3)
• Caution – Don’t Lose Your FEHB Coverage
• Social Security Guide

Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

Last 5 posts by Dennis Damp

• Military Buyback Guide: How to Maximize Your Federal Pension - June 6th, 2026
• OPM Retirement Backlog: What Federal Retirees Should Expect - May 30th, 2026
• Retirement Cost Analysis: How to Prepare for Your Future - May 27th, 2026
• How to Increase Your Retirement Income Before You Retire - May 26th, 2026
• Required Minimum Distributions - May 8th, 2026

Dennis Damp

Dennis V. Damp is an author, retired federal manager, business owner, career counselor and veteran. Damp is the author of 28 books, a recognized benefits expert, and a retired federal manager with 35 years’ service. Dennis has been a guest on hundreds of radio talk shows, CNN’s YOUR MONEY and the Lou Dobbs Cable TV shows, lectured at universities and colleges, produced Internet web sites and training videos, and has written hundreds of articles for national magazines and newspapers. His books have been featured in the Wall Street Journal, Washington Post, New York Times and U.S. News & World Report.

Dennis joined the Air Force in 1968 and spent over three years on active duty and an additional seven years with the Air National Guard. He was hired by the Department of Defense (DOD) after leaving active duty and transferred to the Federal Aviation Administration (FAA) in 1975. He spent the remainder of his career in various positions with the FAA. His last position was technical operations manager at the Pittsburgh International Airport’s air traffic control tower.