3.6% for Social Security, 2.6% for FERS, and a Bill Still Pending for VA
One inflation number, six outcomes: what Social Security, SSI, federal and military retirees, and disabled veterans will see, and when.
The arithmetic behind the 2027 cost-of-living adjustment fits on one line: the July-September CPI-W average of 328.746 is 3.619% above last year's 317.265, rounded to 3.6%. What happens to that number next depends on whose check it lands on.
The Social Security Administration announced the figure on Wednesday, Oct. 14, and the average retired-worker benefit rises $75 a month, from $2,095 to $2,170. Social Security and Civil Service Retirement System (CSRS) annuities take the 3.6% whole, before any Medicare deduction. Federal Employees Retirement System (FERS) annuities and military retired pay under the Career Status Bonus option, known as Redux, get 2.6%. Supplemental Security Income (SSI) works out to about 3.5%. And VA disability compensation rises only if Congress passes a bill that, as of Oct. 15, had not cleared committee in either chamber.
The Social Security Act ties the adjustment to the consumer price index for urban wage earners and clerical workers, the CPI-W. The agency compares the average of July, August and September with the same three months last year, and the Bureau of Labor Statistics' CPI-W series puts those averages at 328.746 and 317.265.
September alone looks hotter. The CPI-W was up 3.9% from a year earlier that month, and the 3.7% in most headlines is a different index, the all-consumers CPI-U, over 12 months. The COLA is an inflation adjustment, not a raise in the ordinary sense, and the largest since 8.7% in 2023; this year's was 2.8%.
Social Security keeps all of it, then Medicare reaches in
The Social Security Administration's announcement, datelined Baltimore, says nearly 72 million beneficiaries see the 3.6% beginning in January 2027. Commissioner Frank J. Bisignano said: "Social Security will implement this cost-of-living adjustment for 76 million Americans, giving them greater financial stability." The formula takes nothing back. Medicare Part B, the premium for outpatient care, can, and the 2027 amount is not known yet.
The Centers for Medicare & Medicaid Services generally release the next year's figures in late October or November, according to GovExec; last year it was Nov. 14. SSA says enrollees will find the 2027 premium in their my Social Security Message Center starting in late November. For now there is only a projection. The 2026 Medicare Trustees Report estimates a 2027 standard premium of $209.50 a month, which is $6.60 above this year's $202.90. Projections move: Newsweek reported that last year's Trustees Report had projected $218.60 for 2027. Everything below assumes $209.50 holds.
For the average retiree enrolled in Part B at the standard premium, $2,095 minus $202.90 leaves $1,892.10 now. Next year, $2,170 minus $209.50 leaves $1,960.50. The net gain is $68.40, or 91.2% of the $75 SSA advertises. A $1,500 benefit keeps $47.40 of its $54 COLA, or 87.8%; at $3,000 the retiree keeps $101.40 of $108, or 93.9%. Smaller checks lose a larger share because the premium is a flat dollar amount.
By law, Part B for current enrollees cannot rise by more than the Social Security COLA, the Railroad Retirement Board explains, and this year it rose $17.90, from $185.00 to $202.90. Against a 2.8% COLA on a hypothetical $2,000 benefit ($56), that increase took 32% of the raise. According to First Command Financial Services, a financial-planning firm, quoted by Stars and Stripes: "It's important to keep in mind that a larger COLA is not necessarily a financial gain."
SSI serves people with limited income and resources. The federal payment standard for an individual goes from $994 to $1,029 a month, which is $35 or 3.52%. A flat 3.6% would be $1,029.78, but the published payment standard is a whole-dollar figure, so the cents drop off. Increased SSI payments begin on Dec. 31, 2026, because Jan. 1 is a holiday.
The one-page COLA notice shows "exact dates and dollar amounts of an individual's new benefit amount and any deductions," online from late November for account holders (create one and enroll in paperless notices by Nov. 18) and by mail in December. For the calendar, see why the COLA is announced in October; Daybreak Wire's earlier read of where this raise was heading came when May inflation hit 4.2%.
Here is how the groups line up. Social Security and CSRS take the full rate; the others do not.
| Group | 2027 COLA | Example monthly gain | What changes the result |
|---|---|---|---|
| Social Security retired worker (average) | 3.6% | +$75 ($2,095 to $2,170) | Part B premium not yet announced |
| SSI, individual | $994 to $1,029 (+$35, 3.52%) | +$35 | Whole-dollar payment standard; paid Dec. 31 |
| CSRS annuitant | 3.6% | +$108 on $3,000 | Full COLA |
| FERS annuitant | 2.6% | +$78 on $3,000 | One-point reduction when COLA exceeds 3% |
| Military retiree | 3.6% | +$90 on $2,500 | Redux/CSB: 2.6% (+$65 on $2,500) |
| VA disability | 3.6% if enacted | +$141.79 at 100% (est.) | Needs a bill; no Part B, not taxable |
Two retirement systems that skip a point
Federal News Network reports that CSRS retirees get the full 3.6% while FERS retirees see 2.6%. The rule sits in a federal regulation, 5 CFR 841.703. When inflation is below 2%, FERS passes it through in full. From 2% to 3%, it pays exactly 2%. Above 3%, it pays one percentage point less than the change. At 3.6%, that is 2.6%.
On a $3,000 monthly annuity, CSRS adds $108 and FERS adds $78, a gap of $30 a month or $360 a year.
This is not a one-year quirk. FedSmith, a federal-retirement news site, tabulates the past five years: 2.0% against 2.8% in 2026, 2.0% against 2.5% in 2025, and a lower FERS rate in 2023 and 2024 too (7.7% against 8.7%, then 2.2% against 3.2%).
The COLA applies to the basic annuity, not to annuity supplements. And it does not apply at all to annuitants under age 62 on the effective date, except survivors, certain disability retirees, law-enforcement and firefighter retirees, and air-traffic controllers. Someone with both Social Security and a FERS annuity gets 3.6% on one and 2.6% on the other, FedSmith notes.
William Shackelford, president of the National Active and Retired Federal Employees Association, told Federal News Network:
"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."
William Shackelford, president, National Active and Retired Federal Employees Association
The Equal COLA Act (H.R. 491 and S. 624) would give FERS annuities full COLAs. It was introduced Jan. 16, 2025, and per Federal News Network the House bill has 90 cosponsors but has so far not seen any movement.
Military retired pay rises by $36 for each $1,000 of monthly pay, according to Military.com and Stars and Stripes, or about $90 a month on $2,500, per Military Times.
Retirees who entered service on or after Aug. 1, 1986 and took the Career Status Bonus get a COLA one percentage point lower: $26 per $1,000, or 2.6%, according to the Defense Department. On $2,500, that is $65 instead of $90, or $25 less a month. Those who retired during 2026 get a prorated first COLA, based on the quarter of retirement.
Military retired pay is also generally reduced by any VA disability compensation, unless the retiree qualifies for Concurrent Retirement and Disability Pay (a VA rating of 50% or higher), so two retirees with the same ratings can see different changes in total income.
VA pay waits for a signature
Military pensions and Social Security have permanent statutory language that triggers their COLAs automatically. VA disability compensation does not. Stars and Stripes reports that rates rise after Congress passes, and the president signs, the Veterans' Compensation Cost-of-Living Adjustment Act, and that Congress must pass a specific bill every year. Veterans need not submit any paperwork.
Each year's act is a one-year law. The 2024 text reads, "Effective on December 1, 2024, the Secretary of Veterans Affairs shall increase ..." Nothing in its text carries into 2027, so Congress has to pass a new act each year, even though some outlets, Military Times among them, describe the 2024 law as tying VA increases to Social Security.
The 2023 act, Public Law 118-6, was approved June 14, 2023. In 2024 the House passed H.R. 7777 on Sept. 17 and the Senate on Sept. 25, and it was approved Nov. 25 as Public Law 118-130. The White House signed S. 2392 on Nov. 25, 2025, effective Dec. 1, 2025. Military.com says lawmakers have passed it every year for decades.
This year's bill, the Veterans' Compensation Cost-of-Living Adjustment Act of 2026, has two versions. S. 4487 was introduced May 11 by Sen. Jerry Moran, R-Kan., with Sen. Richard Blumenthal, D-Conn., as primary cosponsor. H.R. 8552 was introduced April 28, and the House Veterans' Affairs subcommittee on Disability Assistance and Memorial Affairs forwarded it to the full committee by voice vote on June 30. Per the Congressional Research Service's summary of S. 4487, it would raise rates by the same percentage as Social Security's; HadIt.com says H.R. 8552 does the same. As of Oct. 15, neither bill had cleared committee, per HadIt.com citing Congress.gov, and Congress is on recess.
The figures below are estimates, computed by multiplying VA's current table by 1.036 for a veteran alone; the official table comes only after enactment.
| VA rating | Current monthly rate | Estimated 2027 rate | Estimated gain |
|---|---|---|---|
| 10% | $180.42 | $186.92 | +$6.50 |
| 30% | $552.47 | $572.36 | +$19.89 |
| 70% | $1,808.45 | $1,873.55 | +$65.10 |
| 100% | $3,938.58 | $4,080.37 | +$141.79 |
The base is VA's 2026 rate table. Over a year, that is about $1,701 more at 100% and about $78 at 10%.
If the final law keeps the Dec. 1, 2026 date, HadIt.com and SOFX both say the higher rates apply from that date even if the law is signed later, and VA would owe the difference for any months already paid at the old rate. VA pays a month behind, so the payment carrying the December rate is scheduled for Thursday, Dec. 31, 2026, per HadIt.com citing 38 U.S.C. 5120(e); Stars and Stripes says Dec. 31 or early January. That applies only if the bill is law in time.
Part B premiums are never deducted from VA disability compensation, which is paid in full, Military.com notes. It is also not taxable income under IRS Publication 525. Social Security benefits can be: up to 50% become taxable, and up to 85% once half of benefits plus other income tops $34,000 ($44,000 for joint filers), per IRS Publication 915.
Adam Jacob, a 100%-rated veteran, told Stars and Stripes: "The COLA [cost of living adjustment] never really keeps up with inflation. The extra dollars each month for someone who is 100% disabled are not life changing. Don't get me wrong. I am still grateful for it."
Fixed dollar figures move too. The Social Security taxable maximum rises from $184,500 to $192,300, so someone earning above that pays the 6.2% employee tax on $7,800 more, or $483.60. The earnings test for workers under full retirement age goes from $24,480 to $25,560 a year.
From Oct. 16 it is 46 days to Dec. 1 and 76 days to Dec. 31. S. 4487 was introduced 158 days ago and H.R. 8552 171 days ago. In 2024 and 2025 the signature came on Nov. 25, six days before Dec. 1; the 2023 act, by contrast, was signed June 14. The one check with no premium, no income tax and no formula haircut is the only one still waiting for a signature.
