Millions of retirees will start 2026 with a higher monthly payment thanks to the annual cost of living adjustment. The headline figure many people will see is 2.8 percent. That is the estimated COLA based on CPI-W inflation and it applies in full to Social Security and most CSRS annuities. FERS follows a different rule. When inflation is between 2 and 3 percent, the FERS COLA is capped at 2.0 percent. Below is a clear breakdown of how the 2026 COLA is determined, who receives the full boost, who gets a smaller adjustment, and what this means for your take-home benefit.
Table of Contents
2026 COLA For Federal Retirees Quick summary
Item |
Details |
|---|---|
What is changing |
2026 cost of living adjustment projected at 2.8 percent for Social Security and CSRS. Many FERS annuitants receive 2.0 percent based on the FERS diet COLA rule. |
Effective month |
Reflected in January 2026 payments. COLA is computed from CPI-W for July through September each year. |
Who gets full 2.8 percent |
Social Security beneficiaries and CSRS retirees. Certain survivor annuities that follow full CPI-W. |
Who likely gets 2.0 percent |
Most FERS annuitants age 62 and older, with normal FERS COLA rules. Mixed CSRS-FERS service receives a blended result. |
Example on 2,000 dollars benefit |
2.8 percent becomes 2,056 dollars. 2.0 percent becomes 2,040 dollars. |
How to confirm your amount |
Social Security: my Social Security account. Federal annuities: Services Online at OPM or your annual COLA notice. |
Official sites |
Social Security Administration: www.ssa.gov |
How the 2026 COLA is determined
The annual COLA uses the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W. The process compares the average CPI-W level for July, August, and September of the current year with the average for the same three months a year earlier. The percentage change becomes the COLA for the following January.
For 2026 the CPI-W pattern points to a 2.8 percent adjustment. Agencies then apply their program rules. Social Security and CSRS apply the CPI-W change in full. FERS applies a modified method that can reduce the result in years with moderate or higher inflation.
The FERS COLA formula
- If CPI-W is 2.0 percent or less, FERS COLA equals the full CPI-W change
- If CPI-W is above 2.0 percent but less than or equal to 3.0 percent, FERS COLA is fixed at 2.0 percent
- If CPI-W exceeds 3.0 percent, FERS COLA equals CPI-W minus 1.0 percentage point
That is why many FERS retirees will see 2.0 percent in January 2026 while Social Security and CSRS beneficiaries receive 2.8 percent.
Who receives the full 2.8 percent
- Social Security beneficiaries including retirees, survivors, and SSDI recipients
- CSRS annuitants and CSRS survivors whose benefits track CPI-W in full
- Military retired pay and certain survivor programs that use full CPI-W
Who receives a reduced 2.0 percent
- Most FERS annuitants age 62 and over under standard FERS COLA rules
- Some survivors and disability cases under FERS depending on start date and program provisions
- Mixed CSRS and FERS service will receive a weighted result based on each component
What the 2026 COLA means in dollars
Here are simple illustrations on a 2,000 dollars monthly benefit:
- 2.8 percent COLA becomes 2,056 dollars
- 2.0 percent COLA becomes 2,040 dollars
That 16 dollars monthly difference is 192 dollars per year. Over a decade, a series of capped FERS COLAs can create a noticeable gap, especially when health insurance premiums and medical costs rise faster than the headline CPI-W.
Eligibility and timing rules that matter
- When it shows up: The adjustment is reflected in January 2026 payments.
- Proration: If you started receiving a federal annuity within the 12 months before COLA month, your first COLA may be prorated.
- Age thresholds for FERS: Standard FERS COLAs generally begin at age 62, with exceptions for special categories such as law enforcement officers, firefighters, air traffic controllers, and disability retirees.
- No action required: COLAs are automatic. You do not need to file a form to receive them.
Planning tips for 2026
- Review your gross versus net: COLA increases your gross benefit. Your net deposit can still change due to FEHB premiums, dental and vision premiums, or tax withholding.
- Check your notices: Social Security sends a COLA letter. OPM issues a COLA notice and updates Services Online. Verify your banking and address information.
- Budget for health costs: Medical inflation often runs above CPI-W. Build a cushion for Medicare or FEHB premium changes.
- Understand blended cases: If you have both CSRS and FERS service, expect a split calculation. Your COLA will reflect each piece according to its rules.
Frequently asked questions
1) When does the 2026 COLA take effect?
The COLA is reflected in January 2026 payments. Agencies publish final percentages after the CPI-W data for July through September are finalized.
2) Why do FERS retirees receive less than CSRS retirees in some years?
FERS has a diet COLA rule that trims the adjustment when CPI-W is above 2 percent. For 2026 a 2.8 percent CPI-W translates to a 2.0 percent FERS COLA.
3) Will everyone get exactly 2.8 percent or 2.0 percent?
Most beneficiaries will, but a few categories have proration or special rules. Mixed CSRS and FERS service produces a blended rate.
4) How does the COLA interact with Medicare Part B premiums?
Social Security applies the COLA first, then deducts Medicare premiums. The hold harmless rule can protect against a net decline in Social Security checks for many enrollees.
5) Do I need to do anything to receive the COLA?
No. COLAs are automatic. Use your my Social Security account or OPM Services Online to confirm the updated amount and verify direct deposit details.
Bottom line
A 2.8 percent COLA will lift Social Security and CSRS payments at the start of 2026, while many FERS annuitants will see 2.0 percent under the FERS formula. The difference may look small month to month, but it compounds over time. Confirm your exact amount through your official account, factor health premiums into your budget, and keep records of your notices so you can track both your gross and net benefit through the new year.
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