Fixed Raise vs COLA Comparator
Compare flat increases with inflation indexing.
Fixed Raise vs COLA Comparator: Scenario Inputs
Annual percentage rate or benchmark index change.
Inflation & Purchasing Power Analysis
Over 3 years at 3.5% inflation, a $75,000 salary requires $83,154 to retain equal purchasing power. Without matching raises, your real compensation experiences an effective reduction of $7,355 (-9.81%).
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How Fixed Raise vs COLA Comparator Works?
The Fixed Raise vs COLA Comparator works by building 2 pay paths from the same starting salary and comparing them each year.
Enter salary
Type the starting salary.
Enter the fixed raise
Type the flat yearly rate.
Enter inflation
Type actual or expected inflation for each year.
Compare paths
The output shows both salaries, the gap and the total earnings difference.
Fixed Raise vs COLA Comparator Formula
The Fixed Raise vs COLA formula compounds the fixed rate for one path and actual inflation for the other.
Ft = S × (1 + f)t
Ct = S × Πk≤t (1 + πk)
Variables
- f
- Fixed yearly raise
- πk
- Inflation in year k
Worked example
Over 5 years of 4.7%, 8.0%, 4.1%, 2.9% and 2.2% inflation, a $60,000 salary reaches $69,556 with 3% fixed raises and $74,274 with a COLA.
Fixed Raise vs COLA Comparator Conversion Table
This table compares 3% fixed raises with a COLA for a $60,000 salary over 5 example years.
| Year | Inflation | Fixed 3% path | COLA path | Gap (COLA − fixed) | Better option |
|---|---|---|---|---|---|
| Year 1 | 4.7% | $61,800 | $62,820 | +$1,020 | COLA |
| Year 2 | 8.0% | $63,654 | $67,846 | +$4,192 | COLA |
| Year 3 | 4.1% | $65,564 | $70,627 | +$5,064 | COLA |
| Year 4 | 2.9% | $67,531 | $72,675 | +$5,145 | COLA |
| Year 5 | 2.2% | $69,556 | $74,274 | +$4,718 | COLA |
What is Fixed Raise vs COLA Comparator?
The Fixed Raise vs COLA Comparator is a tool that compares a flat yearly raise, such as 3%, with a cost-of-living adjustment (COLA) tied to actual inflation. The fixed raise is known in advance, and the COLA follows prices.
A fixed raise wins in low-inflation years and loses in high-inflation years.
What are the uses of Fixed Raise vs COLA Comparator?
There are 4 main uses of the Fixed Raise vs COLA Comparator.
Choose a contract type
Decide between fixed raises and index-linked raises.
Test inflation risk
See how each option performs in high and low inflation.
Negotiate hybrid terms
Combine a fixed raise with a COLA top-up.
Review past choices
See which option would have paid more in recent years.
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