The Social Security Administration has announced a 3.6% cost-of-living adjustment (COLA) for 2027, taking effect with the January 2027 payments and boosting the average retirement check by roughly $75 a month. This 2027 COLA adjustment also applies to military retirees, disabled veterans, and CSRS annuitants, marking the largest raise since 2023 under the Social Security COLA. However, the FERS COLA 2027 rate is limited to 2.6%, meaning many federal retirees will see a smaller increase.
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Social Security Administration COLA Increase: Why FERS Gets Less
The SSA revealed this figure on Wednesday, October 14, following the Bureau of Labor Statistics’ release of September Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) data. This Social Security Administration COLA increase impacts 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 Social Security COLA 2027 forecasts received a slightly higher figure than anticipated, as 3.6% surpasses the 2.8% distributed in 2026 and exceeds The Senior Citizens League’s 3.5% prediction. Alongside the Social Security Administration COLA increase, the agency lifted the maximum taxable earnings cap from $184,500 to $192,300.
How The SSA Calculates The 3.6% Raise
Under the law, the SSA determines every Social Security Administration COLA increase by comparing the average CPI-W for July, August, and September against the same three-month period from the prior year. Benefits rise if prices climb, whereas stagnant prices leave checks unchanged rather than reducing them. The 2027 COLA increase 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 2027 COLA increase of 3.6%, FERS 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
Consequently, the FERS COLA 2027 rate sits at 2.6% and applies strictly to the basic annuity rather than the annuity supplement, according to Government Executive. This leaves the Social Security Administration COLA increase and the FERS adjustment differing by a full percentage point.
NARFE National President William Shackelford noted:
“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 warn this disparity can accumulate to thousands of dollars over the course of a long retirement. A legislative remedy exists on paper via the Equal COLA Act, a House bill introduced in January 2025 with 90 cosponsors at the time of writing, which would grant FERS annuitants the full adjustment. However, the bill has stalled, leaving the FERS COLA 2027 rate at 2.6% for now.
Shackelford added:
“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 scales upward alongside the Social Security Administration COLA increase, translating to an extra $36 per month for every $1,000 of monthly pension. Meanwhile, VA disability checks will increase by about $6.50 monthly for a 10% rating and roughly $147.08 for a 100% rating with no dependents.
The Social Security Administration COLA increase takes effect in January payments. Beneficiaries can review their Social Security COLA 2027 notice online in late November or receive it via mail in December if they have not opted for paperless notifications. Federal retirees will see their respective COLA adjustments reflected in that same January check, with FERS annuitants receiving a full percentage point less.
Short FAQs
What is the 2027 Social Security COLA increase?
The COLA increase for 2027 is 3.6%, which starts with January 2027 payments and adds about $75 a month to the average retirement check.
Why do FERS retirees get a lower COLA rate?
Under federal law, FERS annuities use a reduced formula when the COLA exceeds 3%, granting FERS retirees 1 percentage point less than the full SSA increase, resulting in a 2.6% rate for 2027.
When will beneficiaries be notified of the 2027 COLA?
Beneficiaries can view their notices online in late November or receive them by mail in December.
Does the 2027 COLA apply to military retirees and veterans?
Yes, the increase applies to military retirement pay and VA disability checks.
