How do FERS cost-of-living adjustments work?
A FERS annuity gets a yearly COLA tied to inflation, but it is trimmed: inflation up to 2% is passed through in full, inflation of 2% to 3% gets 2%, and inflation above 3% gets inflation minus 1 point. Most regular retirees get no COLA until age 62, and the FERS supplement never gets one. For January 2027, Social Security announced 3.6%, so the FERS formula works out to 2.6%. For January 2026, FERS retirees got 2.0%.
The FERS COLA formula
Each year the government compares the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for July, August and September with the same three months a year earlier. Social Security and CSRS retirees get that full increase. FERS retirees get a smaller one, often called the "diet COLA" (OPM: Handbook, Chapter 2, Cost-of-living adjustments).
| CPI-W increase | FERS COLA |
|---|---|
| 2.0% or less | Same as CPI-W |
| 2.0% to 3.0% | 2.0% |
| More than 3.0% | CPI-W minus 1.0 point |
OPM's handbook gives an example: a 2.78% CPI-W increase produces a 2.0% FERS COLA. The adjustment takes effect December 1 and first shows up in the payment you receive in January. OPM also sets a minimum increase of $1 a month (OPM: BAL 26-101).
The effect is small in a low-inflation year and grows when inflation runs hot. Over a long retirement, a FERS annuity usually loses some buying power compared with Social Security, which gets the full CPI-W increase. That's one reason many federal retirees lean on Social Security timing and the TSP for inflation protection.
The 2026 and 2027 COLAs
| Paid starting | CSRS and Social Security | FERS |
|---|---|---|
| January 2026 | 2.8% | 2.0% |
| January 2027 | 3.6% | 2.6% |
2026: OPM confirms CSRS annuitants received 2.8% and FERS annuitants 2.0% (OPM: COLA FAQ). Since 2.8% fell in the 2% to 3% band, FERS got 2.0%.
2027: On October 14, 2026, the Social Security Administration announced a 3.6% COLA for benefits starting in January 2027 (SSA: 2027 COLA fact sheet). The CSRS COLA uses the same CPI-W figure. Because 3.6% is more than 3%, the FERS formula gives 3.6 minus 1, or 2.6%. When we checked, OPM had not yet posted its 2027 letter, so watch OPM's COLA page for the official figure and any proration table.
Who gets a COLA before 62
OPM's rule is that FERS COLAs "do not apply to annuitants who are under age 62 as of December 1," with exceptions. Here's who gets them early, per OPM's handbook and FERS overview (OPM: RI 90-1, FERS overview):
| Type of annuity | COLAs before 62? |
|---|---|
| Regular retirement (MRA+30, 60+20, MRA+10) | No |
| Deferred or postponed annuity | No |
| Special provisions (law enforcement, firefighters, air traffic controllers) | Yes |
| Disability retirement | Yes, except none in the first year while paid at 60% of high-3 |
| Survivor annuities (spouse, former spouse, insurable interest) | Yes |
| Certain military reserve technicians | Yes |
If you retire at your MRA with 30 years at 57, your annuity stays flat for about five years. That's worth building into your budget. Our FERS retirement age guide covers the other things that change at 62.
Your first COLA
The first COLA is normally prorated. You get one-twelfth of the COLA for each month you were on the annuity roll before December 1. Someone who retires near the end of the year gets only a sliver (OPM: Handbook, Chapter 2).
There's an exception that helps early retirees: OPM's handbook says annuitants whose annuity began at least one year before they reached 62 get the full first COLA, not a prorated one, once they become eligible. So a person who retired at 57 gets a full COLA in the first December after turning 62.
A survivor's first COLA is prorated only if the retiree had been retired less than a year. Otherwise the survivor gets the full COLA.
What doesn't get a COLA
- The FERS supplement. OPM's handbook says "the retiree annuity supplement is not increased by cost-of-living adjustments" (OPM: Handbook, Chapter 51). It stays at its starting amount until it ends at 62. See the FERS supplement guide.
- Your TSP. The Thrift Savings Plan has no COLA. Its value depends on investment returns and your withdrawals.
- Your high-3 before retirement. If you leave early and take a deferred annuity, the high-3 used in the formula is based on your pay when you left.
Social Security, by contrast, gets the full CPI-W COLA every January, which is why it can be a strong inflation hedge next to a FERS annuity.
Sam is a made-up FERS retiree who turned 62 before December 1, 2026, and has been retired since 2021. Sam's annuity is $2,500 a month before the 2027 COLA.
- CPI-W increase: 3.6%.
- FERS COLA: 3.6% is more than 3%, so 3.6 minus 1 = 2.6%.
- New monthly annuity: $2,500 × 1.026 = $2,565, starting with the January 2027 payment.
- Compare to CSRS: a full 3.6% COLA would have made it $2,590, so the FERS formula costs Sam $25 a month, or $300 a year, this year.
If Sam were 60 instead, and retired under MRA+30, the annuity would stay at $2,500 in 2027. If Sam were a retired law enforcement officer, the 2.6% COLA would apply at any age.
What to do next
- Check OPM's page in late fall. OPM posts each year's FERS and CSRS COLA on its COLA FAQ.
- Plan for flat years. If you retire before 62 under a regular retirement, budget for no annuity increases until after 62.
- Read your January statement. OPM sends a notice showing your new gross annuity and deductions. Health premium changes often take part of the raise.
- Model inflation. Look at how much of your retirement income has full inflation protection (Social Security) and how much does not.
See your FERS annuity, supplement and Social Security year by year in our planner.
Open the FERS plannerCommon questions
What is the FERS COLA for 2027?
Social Security announced a 3.6% COLA for January 2027. Under the FERS formula, inflation above 3% is reduced by one point, which gives 2.6%. OPM posts the official figure.
What was the FERS COLA for 2026?
2.0%, paid starting January 2026. CSRS retirees received 2.8%.
Why don't I get a COLA before 62?
The law limits FERS COLAs for regular retirees to those 62 or older on December 1. Special provision, disability and survivor annuities are exceptions.
Does the FERS supplement get a COLA?
No. The retiree annuity supplement is never increased by COLAs.
Why is my first COLA smaller?
The first COLA is usually prorated by the number of months you were retired before December 1. People who retired at least a year before 62 get a full first COLA after they turn 62.
Do survivors get FERS COLAs?
Yes. Spouse, former spouse and insurable interest survivor annuities get COLAs regardless of the survivor's age.
General information, not advice. We aren't part of OPM or the Social Security Administration. OPM announces and applies each year's FERS COLA, and its annual notice shows your exact new amount.