The Social Security Administration ( SSA ) announced that the cost-of-living adjustment ( COLA ) for 2027 will be 3.6%, which will take effect from payments starting in January 2027, adding approximately $75 per month to retirement checks on average. The 2027 COLA also applies to CSRS pension recipients, military retirees, and disabled veterans. According to the rules of Social Security COLA, this increase in 2027 is the largest since 2023. However, the COLA for 2027 under FERS is only 2.6%, so for many federal retirees, the amount in their checks during the COLA quarter will be smaller.
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SSA announced this figure on Wednesday, October 14th, shortly after which the U.S. Bureau of Labor Statistics released data on the Consumer Price Index ( CPI-W ) for urban wage earners and civilian personnel in September. This adjustment by the Social Security Administration ( COLA ) covers approximately 76 million Americans.
Director Frank Bisciniano ( Frank Bisignano ) stated:
SSA How to calculate a 3.6% increase
According to legal regulations, SSA will compare the average values of CPI-W for July, August, and September with the average values of the same three months from the previous year. This difference determines each adjustment to social security COLA. If prices rise, benefits will be increased; if there is no increase, the amount of the check will remain unchanged and will not decrease. The COLA in 2027 also exceeded the average level of about 3.1% over the past 10 years.
Why can only retirees with the code FERS receive a 2.6% payout?
CSRS pension recipients will enjoy a full 3.6% increase in COLA for the year 2027, however, for FERS pensions, a reduced formula will be applied:
- COLA higher than 3%: FERS retirees receive 1 percentage point less
- COLA ranges between 2% and 3%; FERS retirees receive 2%.
- COLA less than 2%: FERS Retirees receive all of COLA
NARFE National Chairman William Shackelford ( William Shackelford ) stated:
The COLA of retirees FERS will be cut by a full one percent point, thereby reducing the actual value of their pensions. The impact of inflation on these FERS retirees is no different from that on other retirees, yet they are forced to accept a reduced version of their COLA.
Advocacy groups say that this disparity can accumulate to thousands of dollars over a long retirement period. For federal retirees, the issue of fairness is theoretically solvable: the Equal COLA Act bill proposed by the House of Representatives would provide full adjustments for FERS pension recipients. The bill was introduced in January 2025 and, as of the time of writing this article, it has 90 co-sponsors, but it has not yet been advanced. As a result, the COLA rate in 2027 remains at 2.6%.
Shackelford also stated:
“Equal COLA Act” will correct this injustice. FERS Retirees deserve full protection to maintain the purchasing power of their pensions throughout their retirement period.
What will military retirees and veterans receive?
