Many federal retirees get 2.8% in 2026 COLA, but some to see a smaller increase
The 2026 COLA of 2.8% will be added to retirement benefits beginning in January. But FERS retirees will receive a 2% “diet” COLA.
Jory Heckman
October 24, 2025 9:37 am
2 min read
Starting in January 2026, many federal retirees will see a 2.8% cost-of-living adjustment (COLA) in their Social Security benefits and federal retirement annuities.
That’s a higher rate than last year, and higher than projections set by AARP and the Senior Citizens League. About 75 million people, including retirees and individuals with disabilities, receive Social Security benefits.
The annual COLA is meant to keep federal retirees’ and Social Security recipients’ benefits on pace with rising inflation. But not everyone will receive the full adjustment.
Retirees in the Federal Employees Retirement System (FERS) usually receive a smaller cost-of-living adjustment each year for their annuities, based on the following formula:
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- COLA is over 3%: FERS annuitants receive 1% less than the full COLA
- COLA is between 2% and 3%: FERS annuitants receive a 2% COLA
- COLA is less than 2%: FERS annuitants receive the full COLA
According to those parameters, FERS retirees will receive a “diet” 2026 COLA of 2% for their retirement benefits, starting in January.
The Social Security Administration originally planned to announce the 2026 COLA last week, but postponed the decision because of the ongoing government shutdown, which is now the second-longest on record.
The agency said Social Security retirement benefits will increase by about $56 per month next year.
The National Active and Retired Federal Employees Association (NARFE) said the 2026 COLA doesn’t keep pace with a more than 12% increase in health insurance premiums for federal employees and annuitants next year.
“Social Security is a promise kept, and the annual cost-of-living adjustment is one way we are working to make sure benefits reflect today’s economic realities and continue to provide a foundation of security,” SSA Commissioner Frank Bisignano said in a statement.
Annual COLA increases have averaged about 2.6% over the last decade, but retirees have seen a wide range of adjustments in recent years.
The 2023 COLA was at 8.7%, the largest annual adjustment in more than 40 years. But the 2024 COLA was considerably smaller — annuitants received a 3.2% adjustment for their retirement benefits earlier this year.
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Due to the existing caps on those adjustments, FERS retirees received a 7.7% COLA in 2023 and a 2.2% COLA in 2024.
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