Federal Retirees to Get 2.8% COLA: The Social Security Administration (SSA) has announced a 2.8% cost-of-living adjustment (COLA) for retirees in 2026. This increase is a reflection of the more moderate inflation rates observed across the United States. However, federal retirees who are part of the Federal Employees Retirement System (FERS) will experience a lower increase of only 2.0%. This discrepancy has sparked renewed discussions about fairness and the impact on the purchasing power of government pensioners.
Table of Contents
- Federal Retirees to Get 2.8% COLA in 2026
- Understanding the 2026 COLA
- Who Gets the Full 2.8% — and Who Does Not
- Full Increase for Social Security and CSRS Retirees
- Reduced Increase for FERS Retirees
- Historical Context: From Pandemic Peaks to Inflation Normalization
- The Policy Divide: Calls to Equalize COLAs
- Economic Context: Balancing Relief and Fiscal Prudence
- Verify Your New Benefit Amount
- The Broader Retirement Outlook
- Looking Ahead
- FAQ About Federal Retirees to Get 2.8% COLA in 2026
- Q: Why is the FERS COLA lower than the CSRS COLA?
- Q: When will the increase appear in payments?
- Q: Will my Medicare premium affect the increase?
- Q: Could Congress change the FERS formula?
Federal Retirees to Get 2.8% COLA in 2026
Key FactDetail
Understanding the 2026 COLA
Stephen Goss, the Chief Actuary of the SSA, emphasized that the COLA is a robust tool for protecting retirees from inflation, as it automatically adjusts benefits in line with consumer prices to maintain purchasing power.
Social Security recipients will see an approximate increase of $56 per month on average due to the 2.8% adjustment.
Who Gets the Full 2.8% — and Who Does Not
Full Increase for Social Security and CSRS Retirees
Reduced Increase for FERS Retirees
Current regulations stipulate that FERS retirees receive smaller COLA adjustments when inflation remains at a moderate level.
- When inflation is below 2%, they will receive the full COLA amount.
- When inflation ranges between 2% and 3%, retirees receive a 2% COLA increase.
- When inflation goes above 3%, the COLA is calculated as 1 percentage point less than the total inflation rate.
This “diet COLA” affects the retirement income for the FERS retirees. For example, a retiree receiving $2,000 per month would see an increase of around $40, while a CSRS or Social Security recipient would gain about $56.
William Shackelford, the National President of the National Active and Retired Federal Employees Association (NARFE), pointed out that while inflation impacts all retirees uniformly, the system does not treat all retirees equally.
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Historical Context: From Pandemic Peaks to Inflation Normalization
The 2026 COLA follows a sequence of moderate adjustments over the past few years, with increases of 2.5% in 2025 and 3.2% in 2024. Notably, the 8.7% COLA in 2023 was the largest since 1981, reflecting the surge in inflation following the pandemic.
The Bureau of Labor Statistics (BLS) has attributed the moderation of inflation in 2025 to factors such as decreased energy costs, slower growth in housing prices, and stabilization of supply chains. However, essential expenses like healthcare and food remain higher than pre-pandemic levels.
Dr. Nancy Altman, president of Social Security Works, emphasized that even moderate inflation can erode the purchasing power of seniors, particularly those with fixed incomes, highlighting the crucial role of COLA as a lifeline.
The Policy Divide: Calls to Equalize COLAs
The formula for the FERS reduction was established in 1986 when the system replaced CSRS. The reasoning was that FERS retirees would have Social Security participation and Thrift Savings Plan (TSP) investment earnings to offset smaller COLAs.
Critics now argue that this rationale is outdated. The Equal COLA Act, which was reintroduced in Congress by Representative Gerald Connolly (D-VA), seeks to eliminate the FERS reduction and align the systems.
The Congressional Budget Office (CBO) estimates that implementing equal COLAs would lead to an increase of less than 0.1% of GDP annually in federal pension outlays, representing a relatively small fiscal impact.
Economic Context: Balancing Relief and Fiscal Prudence
While the 2026 COLA offers a measure of relief, it occurs amid ongoing fiscal discussions on U.S. spending and deficit management.
Economists suggest that smaller COLA increases are manageable. However, larger adjustments could put pressure on long-term federal budgets.
Dr. Michael Lutz, an economist at the University of Chicago Harris School of Public Policy, highlighted the challenge of balancing fiscal responsibility with the need for adequate retirement income, noting that COLAs are crucial for retirees but can be costly for the government.
Verify Your New Benefit Amount
- Federal retirees can use the OPM Services Online portal to check their updated annuity details.
- The SSA and OPM are alerting users about a rise in phishing scams. They never request banking information via text messages or emails.
Lisa Kim, spokesperson for the Federal Trade Commission (FTC), advises verifying information through official .gov websites. She warned that scammers use fake COLA notices to steal personal data.
The Broader Retirement Outlook
The SSA projects that future COLAs will likely stay in the 2–2.5% range through 2028 if inflation remains stable.
However, increases in healthcare costs, especially Medicare Part B premiums, could substantially offset the 2026 gain for many retirees.
Mary Johnson, a Social Security policy analyst at The Senior Citizens League, stated that for many seniors, Medicare adjustments will largely absorb the COLA increase.
Despite this, the adjustment underscores the value of indexed benefits, which offer inflation protection unlike most private-sector pensions.
Looking Ahead
FAQ About Federal Retirees to Get 2.8% COLA in 2026
Q: Why is the FERS COLA lower than the CSRS COLA?
A: Federal law places caps on FERS adjustments in order to reduce long-term pension costs. Critics argue that this unfairly penalizes more recent retirees.
Q: When will the increase appear in payments?
A:
Q: Will my Medicare premium affect the increase?
A: Yes, higher premiums will offset the COLA gain for some retirees.
Q: Could Congress change the FERS formula?
The Equal COLA Act has bipartisan support; however, budget negotiations make its passage uncertain.
