Federal Retirees to Get 2.8% COLA in 2026 — But Some Will See Less

Federal Retirees to Get 2.8% COLA: The Social Security Administration (SSA) announced that retirees will receive a 2.8% cost-of-living adjustment in 2026, an increase reflecting moderating inflation across the United States.However, federal retirees under the Federal Employees Retirement System (FERS) will see a smaller 2.0% increase, renewing debate over fairness and purchasing power among millions of government pensioners.

Federal Retirees to Get 2.8% COLA in 2026

Understanding the 2026 COLA

The Cost-of-Living Adjustment (COLA) ensures benefits keep pace with inflation, based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Between July and September 2025, the CPI-W rose 2.8%, leading to the corresponding COLA increase.

“The COLA is one of the strongest inflation protections in the world’s public pension systems,” said Stephen Goss, Chief Actuary of the SSA. “It adjusts automatically with consumer prices, preserving retirees’ purchasing power.”

For Social Security recipients, the 2.8% increase translates to about $56 more per month for the average retiree.

Who Gets the Full 2.8% — and Who Does Not

Full Increase for Social Security and CSRS Retirees

Social Security beneficiaries and retirees under the Civil Service Retirement System (CSRS) — the older federal plan — will receive the full 2.8%. The adjustment will apply automatically to January 2026 payments.

Reduced Increase for FERS Retirees

Under law, FERS retirees receive smaller adjustments when inflation is moderate.

• When inflation is below 2%, they get the full COLA.
• When inflation is between 2% and 3%, they receive a flat 2%.
• When inflation exceeds 3%, they get 1 percentage point less than the full amount.

This “diet COLA,” as some retirees call it, means a FERS retiree receiving $2,000 monthly will see about $40 more, compared with a $56 increase for a CSRS or Social Security recipient.

“Inflation affects every retiree the same way — but the system treats them differently,” said William Shackelford, National President of the National Active and Retired Federal Employees Association (NARFE).

Historical Context: From Pandemic Peaks to Inflation Normalization

The 2026 adjustment marks the third consecutive year of moderate increases, following 2.5% in 2025 and 3.2% in 2024. By contrast, the 8.7% COLA in 2023 — the largest since 1981 — reflected surging post-pandemic inflation.

The Bureau of Labor Statistics (BLS) attributes the 2025 inflation moderation to lower energy costs, slower housing price growth, and stabilized supply chains. Still, essential expenses such as healthcare and food remain well above pre-pandemic levels.

“Even a moderate inflation rate erodes purchasing power for seniors, especially those relying on fixed incomes,” said Dr. Nancy Altman, president of Social Security Works. “The COLA is a lifeline, not a luxury.”

The Policy Divide: Calls to Equalize COLAs

The FERS reduction formula was created in 1986, when the system replaced CSRS. Lawmakers argued that FERS retirees would benefit from Social Security participation and Thrift Savings Plan (TSP) investment earnings, partially offsetting smaller COLAs.

Critics now argue that this logic no longer holds. The Equal COLA Act, reintroduced in Congress by Representative Gerald Connolly (D-VA), seeks to eliminate the FERS reduction and align the two systems.

“The cost of living doesn’t discriminate by retirement system,” Connolly said in an October 2025 statement. “Equal COLAs would restore fairness to federal retirement policy.”

The Congressional Budget Office (CBO) estimates that implementing equal COLAs would increase federal pension outlays by less than 0.1% of GDP annually — a relatively small fiscal impact.

Economic Context: Balancing Relief and Fiscal Prudence

While the 2026 COLA provides relief, it comes amid fiscal debates over U.S. spending and deficit control.
Economists say small increases are manageable, but larger automatic adjustments could pressure long-term federal budgets.

“COLAs are essential for retirees but costly for government,” said Dr. Michael Lutz, an economist at the University of Chicago Harris School of Public Policy. “Balancing fiscal responsibility with retirement adequacy remains an ongoing challenge.”

Verify Your New Benefit Amount

• Social Security recipients can log into their my Social Security accounts in December 2025 to view updated payment details.
• Federal retirees can access the OPM Services Online portal to verify annuity changes.
• Official letters confirming new rates will be mailed in late December 2025.
• The SSA and OPM emphasize they do not send text messages or emails requesting banking information — a key warning amid a rise in phishing scams.

“Always verify through official .gov websites,” said Lisa Kim, spokesperson for the Federal Trade Commission (FTC). “Scammers often use fake COLA notices to harvest personal data.”

The Broader Retirement Outlook

The SSA projects future COLAs will hover around 2–2.5% through 2028 if inflation remains stable.
However, rising healthcare costs — particularly Medicare Part B premiums — could offset much of the 2026 gain for many retirees.

“For many seniors, the COLA increase will be largely absorbed by Medicare adjustments,” said Mary Johnson, Social Security policy analyst at The Senior Citizens League.

Still, the adjustment underscores the value of indexed benefits, especially compared with private-sector pensions that rarely offer inflation protection.

Looking Ahead

The 2.8% COLA reflects slowing inflation but continues to expose structural inequities in how retirement systems adjust for cost pressures. With congressional attention turning to COLA parity legislation and Medicare affordability, 2026 may mark a pivotal year for reforming how America protects retirees from the erosion of inflation.

FAQ About Federal Retirees to Get 2.8% COLA in 2026