Due to recent years of surging inflation and public discussion of the affordability of the cost of living for seniors, there are increasing questions among many federal retirees as to the amount of the future cost-of-living adjustment (COLA) that CSRS and FERS annuitants will receive, and when they will receive it.
What is the 2026 COLA for FERS and CSRS Retirees?
As announced in October, the 2026 federal retiree cost-of-living adjustment (COLA) will be 2.8 percent for those under the Civil Service Retirement System (CSRS) and 2.0 percent for those under the Federal Employees Retirement System (FERS).
When will CSRS and FERS retirees get their 2026 COLA?
According to the Office of Personnel Management:
“Cost-of-Living Adjustments are effective each December first. The adjustment appears in your payment on the first business day of January, which is when your benefit for December is paid. Federal Employees Retirement System (FERS) and FERS Special Cost-of-Living Adjustments are not provided until age 62, except for disability, survivor benefits, and other special provision retirements. FERS disability retirees get the adjustment, except when they are receiving a disability annuity based on 60 percent of their high-3 average salary. Also, under FERS, if you have a CSRS component, the component is subject to the CSRS COLA calculation”.
High-3 Average Salary: What Is It and How Is It Calculated?
How is a COLA calculated?
SEE ALSO: Guide to Federal Retiree COLAs: What Are They and How Are They Calculated?
The Social Security Act specifies a formula for determining each COLA. According to the formula, COLAs are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-Ws are calculated on a monthly basis by the Bureau of Labor Statistics.
A COLA effective for December of the current year is equal to the percentage increase (if any) in the average CPI-W for the third quarter of the current year over the average for the third quarter of the last year in which a COLA became effective. If there is an increase, it must be rounded to the nearest tenth of one percent. If there is no increase, or if the rounded increase is zero, there is no COLA.
How is the difference between the CSRS COLA and FERS COLA determined?
The following table summarizes the FERS COLA in relation to the CSRS COLA:
For a complete understanding of the federal retiree COLA, read Guide to Federal Retiree COLAs which discusses how the COLA is calculated, and how the COLA affects CSRS and FERS annuities, survivor annuities and other federal employee death benefits.
Guide to Federal Retiree COLAs: What Are They and How Are They Calculated?