2027 COLA delivers 3.6% raises while excluding some federal retirees

The 2027 Social Security Administration cost-of-living adjustment is set at 3.6% and will take effect with the January 2027 payments, providing an estimated $75 monthly boost to the typical retirement benefit. This 2027 COLA adjustment also applies to military retirees, disabled veterans, and Civil Service Retirement System (CSRS) annuitants. Overall, the 2027 Social Security COLA marks the largest raise since 2023. However, because the 2027 FERS COLA rate is limited to 2.6%, numerous federal retirees will experience a smaller increase in their payments.

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Social Security Administration COLA Increase: Why FERS Gets Less

The SSA announced this percentage on Wednesday, October 14, following the Bureau of Labor Statistics’ release of the September Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) data. This adjustment will impact approximately 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 tracking 2027 forecasts received a slightly higher figure than anticipated, as the 3.6% rate surpasses the 2.8% issued in 2026 and exceeds The Senior Citizens League projection of 3.5%. Alongside the COLA announcement, the agency raised the maximum amount of earnings subject to the Social Security tax from $184,500 to $192,300.

How The SSA Calculates The 3.6% Raise

Under the law, the SSA determines each adjustment by comparing the average CPI-W figures from July, August, and September with the corresponding three-month period from the preceding year. Rising prices drive benefits up, whereas stable or falling prices result in flat checks rather than reductions. The 2027 COLA percentage also exceeds the roughly 3.1% average seen over the past decade.

Why FERS Retirees Only Get 2.6%

While CSRS annuitants receive the full 3.6% adjustment, Federal Employees Retirement System annuities are governed by a different 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

This structure brings the 2027 FERS COLA rate to 2.6%, which applies solely to the basic annuity rather than the annuity supplement, according to Government Executive. Consequently, the general Social Security adjustment and the FERS adjustment differ by a full percentage point.

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 point out that this discrepancy can accumulate to thousands of dollars over the course of a lengthy retirement. A legislative remedy has been proposed in the form of the Equal COLA Act, a House bill introduced in January 2025 that would grant FERS annuitants the full adjustment. Although it has secured 90 cosponsors as of this writing, the legislation has not advanced, leaving the 2027 FERS rate at 2.6% for the time being.

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 benefits will increase alongside the general Social Security adjustment, translating to an extra $36 per month for every $1,000 of pension. Department of Veterans Affairs disability payments will also climb by roughly $6.50 monthly for a 10% disability rating and about $147.08 for a 100% rating without dependents.

The updated payments will arrive in January. Beneficiaries can review their official notices online starting in late November or receive them through postal mail in December if they have not opted for paperless delivery. Federal retirees will see their respective adjustments—including the full-point reduction for FERS annuitants—reflected in those same January disbursements.