The cost-of-living adjustment (COLA) for CSRS annuities, military retirement pay and Social Security benefits is 3.6%, while FERS annuities will rise 2.6%, according to NARFE News.
Key Facts
- 3.6% COLA: CSRS annuities, military retirement annuities and Social Security benefits
- 2.6% COLA: FERS annuities
- Gap: 1 percentage point between FERS and the other groups
- Effective date: NARFE's article text says the increase applies to payments in January 2026, but the headline references 2027. Confirm the effective year with the source, SSA, OPM or DFAS before making financial plans.
- Illustrative impact: On a $3,000 monthly annuity, 3.6% adds about $108 per month. A 2.6% increase adds about $78.
Why FERS Is Lower
Under federal law, FERS COLAs are tied to the Consumer Price Index but capped when inflation runs high:
- If the CPI-W increase is 2% or less, FERS retirees get the full increase.
- If it falls between 2% and 3%, FERS retirees get 2%.
- If it is 3% or more, FERS retirees get the CPI-W increase minus 1 percentage point.
A 3.6% adjustment under that formula yields 2.6% for FERS. CSRS, military retired pay and Social Security receive the full CPI-based increase.
What It Means For You
CSRS retirees, military retirees and Social Security recipients: Expect a full 3.6% increase in your monthly payment.
FERS retirees: Your annuity rises 2.6%. FERS retirees generally must be 62 or older to receive a COLA. Exceptions include disability retirees, survivors, and law enforcement officers, firefighters and air traffic controllers.
Those with combined income streams: Many federal retirees collect a FERS or CSRS annuity, Social Security and sometimes military retired pay. Each is adjusted separately, so the blended increase will depend on your mix of income.
Those still working: The FERS/CSRS gap affects long-term retirement planning. You can estimate how COLAs may affect your annuity over time with a FERS retirement calculator.
Next Steps
- Watch for official notices from OPM (CSRS and FERS), DFAS (military retirees) and SSA confirming your new payment amount.
- Check the effective date against official agency announcements.
- Review withholdings, including federal tax, FEHB premiums and TRICARE or Medicare Part B costs, which can offset part of the increase.
Source: NARFE News