Annually, COLAs are based on inflation as tracked by the Bureau of Labor Statistics' Consumer Price Index. Changes in prices across a market basket of goods and services from the third quarter of last year to the third quarter of this year determine the January COLA.
Military and federal civilian retirees, survivor benefit annuitants, disabled veterans and Social Security recipients will get a 2.8% cost of living adjustment in January/2019. That represents the largest increase in the past seven years.