2027 COLA Brings 3.6% Raises, but Some Federal Retirees Lose Out

The Social Security Administration COLA increase for 2027 is 3.6%, and it starts with January 2027 payments, adding about $75 a month to the average retirement check. The 2027 COLA increase also goes to CSRS annuitants, military retirees and disabled veterans. Under the Social Security COLA, 2027 brings the biggest raise since 2023. The FERS COLA 2027 rate is only 2.6%, though, so for a lot of federal retirees, COLA season comes with a smaller check.

Social Security Administration COLA Increase: Why FERS Gets Less

The SSA announced the figure on Wednesday, October 14, right after the Bureau of Labor Statistics released September data for the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This Social Security Administration COLA increase reaches about 76 million Americans.

Commissioner Frank Bisignano stated:

“Social Security will implement this cost-of-living adjustment for 76 million Americans, giving them greater financial stability.”

Retirees who followed the Social Security COLA 2027 forecasts got a slightly better number than expected, since 3.6% beats the 2.8% paid in 2026 and also tops The Senior Citizens League’s 3.5% projection. Along with the Social Security Administration COLA increase, the agency also raised the maximum taxable earnings from $184,500 to $192,300.

How The SSA Calculates The 3.6% Raise

By law, the SSA takes the average CPI-W for July, August and September and compares it with the same three months of the prior year, and that gap sets every Social Security Administration COLA increase. If prices rise, benefits go up, and if they don’t, checks stay flat and never drop. The 2027 COLA increase also lands above the roughly 3.1% average of the last 10 years.

Why FERS Retirees Only Get 2.6%

CSRS annuitants get the full 2027 COLA increase of 3.6%, but FERS annuities follow a reduced formula:

• COLA above 3%: FERS retirees get 1 percentage point less
• COLA between 2% and 3%: FERS retirees get 2%
• COLA below 2%: FERS retirees get the full COLA

That puts the FERS COLA 2027 rate at 2.6%, and it only covers the basic annuity, not the annuity supplement, according to Government Executive. So the Social Security Administration COLA increase and the FERS adjustment end up a full percentage point apart this year.

NARFE National President William Shackelford said:

“FERS retirees will have their COLAs reduced by an entire percentage point, reducing the real value of their annuities. Inflation impacts these FERS retirees the same way as all other retirees, yet they are forced to accept a diet COLA.”

Advocacy groups say that gap can add up to thousands of dollars over a long retirement. For federal retirees, COLA fairness has a fix on paper: the Equal COLA Act, a House bill that would give FERS annuitants the full adjustment. Lawmakers introduced it in January 2025, and it has 90 cosponsors at the time of writing, but it hasn’t moved, so the FERS COLA 2027 rate stays at 2.6% for now.

Shackelford had this to say:

“The Equal COLA Act would remedy this inequity. FERS retirees deserve full protection to maintain the purchasing power of their annuity throughout retirement.”

What Military Retirees And Veterans Get

Military retirement pay rises in step with the Social Security Administration COLA increase, which works out to $36 for every $1,000 of monthly pension. VA disability checks also rise by about $6.50 a month at a 10% rating and about $147.08 at 100% with no dependents.

The Social Security Administration COLA increase hits payments in January. Beneficiaries can see their Social Security COLA 2027 notice online in late November, or get it by mail in December if they never signed up for paperless notices. For federal retirees, COLA differences show up in that same January check, with FERS annuitants getting a full point less.