Federal retiree cost-of-living adjustments follow the CPI-W: CSRS annuities get the full increase, while FERS annuities get the same figure only when inflation is under 2 percent, a flat 2 percent when it is between 2 and 3 percent, and 1 point less when it is above 3 percent; for January 2026 that meant 2.8 percent for CSRS and 2.0 percent for FERS.
Every fall, federal retirees and employees close to retirement start watching inflation numbers. Will the COLA be big this year? Why does my CSRS neighbor get more than I do? Why did my first COLA look smaller than the headline? These are reasonable questions, and the answers are buried in a mix of statute, inflation data and OPM tables.
The core idea is simple. A cost-of-living adjustment, or COLA, raises your annuity each January so it keeps up, at least partly, with rising prices. The government measures inflation one way for everyone. Then the rules split: CSRS retirees get the whole increase, and FERS retirees get a trimmed version once inflation goes above 2 percent.
Think of the COLA as a raise that follows prices. For CSRS it follows prices closely. For FERS it follows them on a shorter leash, and for most FERS retirees under 62 it does not follow them at all yet.
This guide explains how the COLA is set from the CPI-W, the FERS diet COLA rule word for word, the 2026 figures, when the 2027 COLA is decided, and how COLAs add up over a retirement. It is general education from FFEBA, an education organization.
01What is a federal retiree COLA?
A federal retiree COLA is an annual percentage increase to CSRS and FERS annuities, based on inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). It takes effect December 1 and first shows up in the annuity payment you receive in January (OPM, retrieved 2026-07-05).
- CPI-WThe Consumer Price Index for Urban Wage Earners and Clerical Workers, published monthly by the Bureau of Labor Statistics. The same index drives Social Security COLAs.
- CSRS COLAThe full CPI-W increase, applied to CSRS annuities and survivor annuities.
- FERS COLAThe CPI-W increase reduced by the diet COLA rule when inflation is above 2 percent.
- Diet COLAThe informal name for the FERS rule that trims COLAs when inflation runs above 2 percent.
- ProrationThe reduction applied to a retiree's first COLA when they have been retired for less than a full year.
A COLA is different from a pay raise. Employees get an annual pay adjustment decided by the President and Congress; retirees get a COLA set by formula. Our federal pay guide covers how employee raises are set.
02How is the COLA calculated from CPI-W?
The COLA is the percentage increase in the average CPI-W for July, August and September of the current year over the same three-month average a year earlier (SSA, retrieved 2026-10-11). That single number becomes the Social Security COLA and the CSRS COLA, and it is the starting point for the FERS COLA.
- 01
Average the third quarter
Add the CPI-W for July, August and September and divide by three.
- 02
Compare to last year
Divide by the same three-month average from the prior year.
- 03
Round to one decimal
The percentage increase, rounded to a tenth of a percent, is the CPI-based COLA.
- 04
Apply the system rule
CSRS gets that full figure. FERS applies the diet COLA rule.
- 05
Pay it in January
The COLA is effective December 1 and first appears in the January payment.
For 2026, the third-quarter CPI-W rose 2.8 percent from 2024 to 2025, which produced a 2.8 percent Social Security COLA (SSA, retrieved 2026-10-11) and a 2.8 percent CSRS COLA (OPM, retrieved 2026-07-05).
03What is the FERS diet COLA rule?
The FERS diet COLA rule is set by statute, and in our dataset it reads: "FERS COLA (5 U.S.C. 8462): if the CPI-W increase is under 2 percent FERS matches CSRS; between 2 and 3 percent FERS is capped at 2 percent; over 3 percent FERS is the CSRS figure minus 1 point. FERS non-disabled retirees under age 62 generally receive no COLA." (OPM cost-of-living page with SSA CPI-W series, retrieved 2026-07-05.)
In table form, using hypothetical CPI-W increases for illustration:
| CPI-W increase | CSRS COLA | FERS COLA | Why |
|---|---|---|---|
| 1.5% | 1.5% | 1.5% | Under 2 percent: FERS matches CSRS |
| 2.0% | 2.0% | 2.0% | At the bottom of the cap band: 2 percent |
| 2.5% | 2.5% | 2.0% | Between 2 and 3 percent: capped at 2 percent |
| 3.0% | 3.0% | 2.0% | Top of the cap band: 2 percent |
| 3.5% | 3.5% | 2.5% | Over 3 percent: CSRS minus 1 point |
| 8.7% | 8.7% | 7.7% | Over 3 percent: CSRS minus 1 point (the actual January 2023 figures) |
Sources: rule from 5 U.S.C. 8462 as recorded in FFEBA's OPM dataset (retrieved 2026-07-05); 8.7 and 7.7 percent are the January 2023 CSRS and FERS COLAs (OPM and SSA series, retrieved 2026-07-05). The other rows are hypothetical examples, not forecasts.
When inflation runs between 2 and 3 percent, every FERS retiree gets the same 2 percent, no matter what prices did.
04What are the 2026 COLA figures?
The COLA first paid in January 2026, effective December 1, 2025, was 2.8 percent for CSRS annuitants and 2.0 percent for FERS annuitants (OPM, retrieved 2026-07-05). Because the CPI-W increase of 2.8 percent fell inside the 2 to 3 percent band, the FERS COLA was capped at 2 percent.
Worked example (educational estimate on the assumptions shown). A FERS retiree age 62 or older, retired for all of 2025, receiving a $2,500 monthly annuity before the COLA, would see about $50 more per month, or about $2,550, starting with the January 2026 payment. A CSRS retiree with the same $2,500 annuity would see about $70 more, or about $2,570. OPM's rounding and any deductions such as FEHB premiums affect the actual net payment.
Your record, not our example
Want this run on your own numbers?
A Federal Retirement Consultant (FRC) works through your own records with you 1:1. The review is free and nothing is booked until you choose a time.
05When will the 2027 COLA be announced?
The 2027 COLA will be set when the Bureau of Labor Statistics publishes September 2026 CPI-W data, which completes the July to September average; that release was expected in mid-October 2026 (Nasdaq, retrieved 2026-10-11). As of October 11, 2026, the 2027 COLA had not been announced.
Once announced, the 2027 COLA will be effective December 1, 2026 and first paid in January 2027. The same rules apply: CSRS will receive the full CPI-W figure, and FERS will receive the figure after the diet COLA rule. We do not publish COLA forecasts. We update this page with the official CSRS and FERS figures, and their source and date, when they are released.
- Watch the September CPI release. That is the last data point; the COLA is known the day it is published.
- Expect a smaller first COLA if you retired during 2026. It will be prorated.
- Check your age. If you are a regular FERS retiree under 62, the 2027 COLA generally will not apply to your annuity yet.
- Watch Medicare and FEHB premiums. Higher premiums in January can absorb part of a COLA in your net payment.
06Do FERS retirees under 62 get a COLA?
Generally no. Regular FERS retirees do not receive cost-of-living adjustments on their annuity until they reach age 62 (OPM, retrieved 2026-07-05). The exceptions are disability retirees, survivor annuitants, and special provision retirees such as law enforcement officers, firefighters and air traffic controllers, who receive COLAs before 62.
- At 62, your annuity catches up. When a regular FERS retiree turns 62, OPM recomputes the annuity as if the COLAs since retirement had been paid, then pays COLAs going forward. The missed COLA payments before 62 are not paid back.
- The FERS supplement never gets a COLA. It stays flat until it ends at 62.
- Deferred and postponed retirees. COLAs on a deferred or postponed annuity generally start once the annuity begins and follow the same age 62 rule.
- CSRS has no age limit. CSRS annuities receive COLAs regardless of age, prorated in the first year.
This is one of the biggest gaps in a FERS retirement that starts in your 50s: several years of rising prices with a flat annuity and a flat supplement. Planning for it, often with TSP withdrawals, is a core part of retiring before 62.
07How have federal COLAs added up over time?
Over the last eight years, CSRS and FERS COLAs were identical in low-inflation years and separated sharply when inflation ran above 2 percent. The table below shows the COLAs first paid from January 2019 through January 2026.
| Paid | CSRS COLA | FERS COLA |
|---|---|---|
| January 2026 | 2.8% | 2.0% |
| January 2025 | 2.5% | 2.0% |
| January 2024 | 3.2% | 2.2% |
| January 2023 | 8.7% | 7.7% |
| January 2022 | 5.9% | 4.9% |
| January 2021 | 1.3% | 1.3% |
| January 2020 | 1.6% | 1.6% |
| January 2019 | 2.8% | 2.0% |
Source: OPM cost-of-living page with the SSA CPI-W COLA series and the 5 U.S.C. 8462 FERS rule (retrieved 2026-07-05). Every COLA on record, back to the start of FERS COLAs in 1988 and earlier for CSRS, is on our COLA history page.
Worked example (historical arithmetic, educational estimate on the assumptions shown). Take a $2,000 monthly annuity in December 2018 and apply each full COLA above in turn, assuming a retiree eligible for every COLA with no proration. The CSRS annuity would have grown to about $2,649 a month by January 2026, a rise of about 32.4 percent. The FERS annuity would have grown to about $2,522, a rise of about 26.1 percent. That gap of roughly $127 a month comes entirely from the diet COLA rule. This applies historical COLAs; it is not a projection of future adjustments.
08How is the first COLA prorated for new retirees?
If you retired during the year, your first COLA is prorated based on how many months you received an annuity before the December 1 effective date, using a proration table OPM publishes each year (OPM, retrieved 2026-07-05). Someone retired for the full year gets the full COLA; someone retired for only a few months gets a fraction.
That is why your first COLA can look smaller than the headline figure. From your second year onward, you receive the full COLA for your system, subject to the FERS age 62 rule.
Free benefits review
Where are you in your federal career?
- 01More than 5 years from retirement
- 021 to 5 years from retirement
- 03Less than a year from retirement
- 04Already retired
- 05Newer to federal service
- 06Not sure yet
Pick one to start your match: five short questions, free, no obligation.
09Moving forward with COLAs in your retirement plan
COLAs determine how well your annuity keeps up with prices over a retirement that can last 30 years or more. For CSRS retirees, the full CPI-W COLA does much of the work. For FERS retirees, the diet COLA rule and the under-62 rule mean the TSP and Social Security, whose COLA is the full CPI-W figure, carry more of the inflation load. Our Social Security guide for federal employees and the FERS annuity guide explain the other pieces, and the FERS pension estimator gives an educational estimate of your annuity on assumptions you enter, not a promise.
FFEBA is an education organization. If you want someone to look at your own numbers, we can match you with a Federal Retirement Consultant (FRC), a professional trained on federal benefits. The FRC designation is listed with FINRA. The first review is free, nothing is booked until you choose a time, and you are never obligated to work with anyone we introduce. Get matched with an FRC.
10Questions federal employees ask
What is the 2026 COLA for federal retirees?
The COLA first paid in January 2026 was 2.8 percent for CSRS annuitants and 2.0 percent for FERS annuitants, effective December 1, 2025 (OPM, retrieved 2026-07-05). The FERS figure is smaller because of the diet COLA rule, which caps FERS at 2 percent when inflation runs between 2 and 3 percent.
When will the 2027 COLA be announced?
The 2027 COLA is set once the Bureau of Labor Statistics publishes September 2026 CPI-W data, expected in mid-October 2026. As of October 11, 2026 it had not been announced. It will first appear in January 2027 annuity payments, effective December 1, 2026.
Does the FERS pension have a COLA?
Yes, with limits. FERS annuities receive COLAs under the diet COLA rule, but regular FERS retirees generally get no COLA until age 62. Disability retirees, survivor annuitants and special provision retirees are exceptions (OPM, retrieved 2026-07-05).
Why is the FERS COLA lower than the CSRS COLA?
Federal law (5 U.S.C. 8462) reduces the FERS COLA when inflation is above 2 percent: it is capped at 2 percent when the CPI-W increase is between 2 and 3 percent, and is the CSRS figure minus 1 point when the increase is above 3 percent. CSRS gets the full CPI-W increase.
Does the FERS supplement get a COLA?
No. The FERS supplement is not increased by cost-of-living adjustments. It stays at its starting amount until it ends at 62.
Is the federal retiree COLA the same as the Social Security COLA?
The CSRS COLA uses the same CPI-W calculation as Social Security, so the two match: 2.8 percent for 2026 (SSA and OPM, retrieved 2026-10-11 and 2026-07-05). The FERS COLA starts from the same number but is reduced by the diet COLA rule when inflation is above 2 percent.
Reviewed by the FFEBA education team. Last reviewed October 2026.
Sources
- U.S. Office of Personnel Management, cost-of-living adjustments (current-year CSRS and FERS COLA and proration tables), retrieved 2026-07-05
- Social Security Administration, CPI-W COLA series (historical COLAs used with the FERS rule), retrieved 2026-07-05
- Social Security Administration, 2026 cost-of-living adjustment fact sheet, retrieved 2026-10-11
- U.S. Office of Personnel Management, retirement FAQs on COLAs for FERS retirees under 62 (via FFEBA FAQ data), retrieved 2026-07-05
- Nasdaq / The Motley Fool, when will we know the 2027 Social Security COLA (September CPI release timing), retrieved 2026-10-11
Every government figure on this page carries its source and retrieval date. Worked examples are educational estimates on the assumptions shown, not a projection of any person's benefit. FFEBA is an education organization, not a financial advisor.
