Since many of them start out in the services while still in their teens, this means that taxpayers are writing substantial retirement checks to codgers in their late thirties. The average military man or woman retires at age 44. Almost all private pensions are calculated from a five-year salary average. But most public employee plans use a three-year average or less, and many also consider other forms of compensation, like overtime and, in some cases, even unused vacation time and the department car. This makes it easier for clever workers to spike their lifetime pensions by saving vacation days and jacking up their overtime as they approach retirement.
COLAs are extra payments, added on to match inflation.
One hundred percent of federal retirees and roughly 50 percent of state and local retirees get them every year, automatically, while only about 1 percent of private retirees do. Over time, the small boosts compound to substantial sums. EBRI's Salisbury likes to give the example of a retiring Secret Service officer with an average background. Just ask former Congressman Hastings Keith. But Keith is begging to be cut off.