2027 Federal COLA Grants 3.6% Raise, Leaving Some Retirees Out

Beginning with January 2027 payments, the Social Security Administration’s cost-of-living adjustment (COLA) is set at 3.6%, which adds roughly $75 per month to the typical retirement check. This 2027 COLA adjustment also applies to military retirees, disabled veterans, and CSRS annuitants. This marks the largest raise under the Social Security COLA since 2023. However, the FERS COLA 2027 rate stands at only 2.6%, meaning many federal retirees will see a smaller increase in their checks.

Social Security Administration COLA Increase: Why FERS Gets Less

The figure was announced by the SSA on Wednesday, October 14, following the release of September data for the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) by the Bureau of Labor Statistics. Approximately 76 million Americans will benefit from this Social Security Administration COLA increase.

Commissioner Frank Bisignano stated:

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

Retirees tracking Social Security COLA 2027 projections received a slightly higher figure than anticipated, as 3.6% surpasses the 2.8% distributed in 2026, as well as the 3.5% forecast from The Senior Citizens League. Alongside the Social Security Administration COLA increase, the maximum taxable earnings limit was also adjusted upward from $184,500 to $192,300.

How The SSA Calculates The 3.6% Raise

By law, every Social Security Administration COLA increase is determined by comparing the average CPI-W figures for July, August, and September against the corresponding three-month period from the previous year. Benefits rise when prices go up, while checks remain flat and never decrease if prices fall. Furthermore, the 2027 COLA increase exceeds the roughly 3.1% average seen over the past 10 years.

Why FERS Retirees Only Get 2.6%

While CSRS annuitants receive the full 2027 COLA increase of 3.6%, FERS annuities operate under a restricted 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

As noted by Government Executive, this brings the FERS COLA 2027 rate to 2.6%, applying exclusively to the basic annuity rather than the annuity supplement. Consequently, the Social Security Administration COLA increase and the FERS adjustment differ by a full percentage point this year.

NARFE National President William Shackelford stated:

“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.”

Advocates point out that this discrepancy can accumulate to thousands of dollars across a prolonged retirement. A legislative solution exists on paper for federal retirees seeking COLA equity: the Equal COLA Act, a House bill introduced in January 2025 designed to grant FERS annuitants the full adjustment. Although it had 90 cosponsors at the time of writing, the bill has not advanced, leaving the FERS COLA 2027 rate at 2.6% for the time being.

Shackelford remarked:

“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 scale directly with the Social Security Administration COLA increase, translating to $36 for every $1,000 of monthly pension. Similarly, VA disability payments increase by approximately $6.50 per month for a 10% disability rating and roughly $147.08 for a 100% rating with no dependents.

The Social Security Administration COLA increase takes effect in January disbursements. Beneficiaries can view their Social Security COLA 2027 notice digitally in late November or receive it via mail in December if they have not opted for paperless notifications. For federal retirees, COLA variations will be reflected in those same January disbursements, with FERS annuitants receiving one full percentage point less.

?Frequently Asked Questions

01What is the COLA increase for 2027?

The Social Security COLA increase for 2027 is 3.6%, which begins with payments issued in January 2027.

02Why do FERS retirees get a lower COLA rate?

FERS annuities follow a specific legal formula that reduces the standard COLA by 1 percentage point whenever the adjustment exceeds 3%, resulting in a 2.6% rate for 2027.

03When will beneficiaries be notified of the new COLA amounts?

Beneficiaries can view their notices online in late November, or receive paper notices by mail in December.

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