Federal retirees and Social Security beneficiaries will see a 3.6 percent cost-of-living adjustment (COLA) in 2027. Retirees under the Federal Employees Retirement System (FERS) will get a 2.6 percent increase. The COLA takes effect December 1, 2026, and will appear in January 2027 payments.

The Social Security Administration (SSA) announced the figure on October 14, following the release of September inflation data. The adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The third-quarter 2026 average was 3.6 percent higher than the third-quarter average a year earlier.

By law, CSRS annuitants receive the full COLA. FERS COLAs are reduced when inflation is higher:

• If the CPI-W increase is below 2 percent, FERS retirees receive the full amount.
• If it is between 2 and 3 percent, FERS retirees receive a flat 2 percent.
• If it is above 3 percent, FERS retirees receive 1 percentage point less than the full increase.

Because this year’s figure is above 3 percent, eligible FERS retirees receive 2.6 percent. On a $3,000 monthly annuity, that means $3,078 under FERS compared with $3,108 under CSRS, a difference of $30 per month. The gap compounds over time. Most FERS retirees also become eligible for COLAs only at age 62, with exceptions for certain categories such as law enforcement officers, firefighters and air traffic controllers.

FMA has long supported the Equal COLA Act (H.R. 491 / S. 624 in the 119th Congress), sponsored by Sen. Alex Padilla (D-CA) and, in the House, Rep. James Walkinshaw (D-VA). The bill would tie the annual FERS COLA to the same CPI-W increase used for CSRS and Social Security, ending the reduction for FERS annuitants. It would apply to COLAs made after enactment and would not change the age-62 eligibility rule, although FMA supports eliminating that, as well. Had it been law this year, eligible FERS retirees would receive 3.6 percent instead of 2.6 percent.

FMA is a member of a broader coalition of federal employee groups that endorse the legislation. The bill has been introduced in multiple Congresses without advancing to a floor vote. FMA encourages members to contact their representatives and senators to ask for their support.

To track the progress of the Equal COLA Act, click here.