2027 COLA for Federal Retirees: 3.5% Headline vs 3.3% Count

Last Updated: October 11, 2026 (Updated October 11, 2026: corrected the FERS full-COLA history and the average Social Security benefit figure)

The 2027 COLA is now two-thirds real. August CPI-W landed at 328.481 this morning, and with July's 327.104 already in the books the two-month average runs 3.3% above the Q3 2025 baseline. One month remains. September's index arrives October 14, 2026; Social Security is expected to announce the official number the same morning.

This page tracks the 2027 COLA month by month, explains exactly how the FERS COLA cap works, and includes the original dollar-impact table no competitor has published.

September 27, 2026 Update: Why the Trades Say 3.5% and the Count Says 3.3%

FedWeek, FedSmith and the Senior Citizens League have spent the last two weeks headlining a 3.5% COLA. This tracker says 3.3%. Both start from the same BLS release: 3.5% is TSCL's forecast of where the September finish lands, 3.3% is the running two-month average the statute actually uses.

The 3.5% figure is the Senior Citizens League's forecast for the final COLA (its September 11 release), which the trade press ran as the headline; August alone, 328.481 against August 2025's 317.306, was a 3.52% rise for that single month. The COLA statute does not use a single month. It compares the average of July, August and September against the same three-month average a year earlier. The 2025 baseline is 317.265 (316.349, 317.306 and 318.139 averaged). The two 2026 months in hand average 327.793 (327.104 and 328.481), which is 3.32% above the baseline, and that rounds to the 3.3% this page has carried since September 11.

September's index is the only number left, and it carries one-third of the weight. Run through the statute's arithmetic with the unrounded 2025 baseline, the final figure rounds to 3.5% only if September prints at about 329.05 or higher (a 0.17% rise on top of August's 0.42%), to 3.4% if September lands between about 328.09 and 329.05 (a flat September at 328.481 gives 3.39%, so 3.4%), and holds at 3.3% only if September falls to between about 327.14 and 328.09. These are the conditional outcomes of the formula, not a forecast of September inflation; the scenarios table below shows the same three cases.

BLS lists the September CPI for October 14, 2026, at 8

a.m. ET, and Social Security is expected to announce the official COLA the same morning (SSA has not posted a 2027 announcement date). What is no longer in doubt is that BLS will be open: Public Law 119-103, approved September 2, 2026, funds the government through December 11, 2026.

September 11, 2026 Update: August Ran Hotter, and the Count Moves to 3.3%

August 2026 CPI-W: 328.481, released this morning by BLS. That is a 0.42% rise from July, the largest monthly increase since May, after July came in flat.

Two things to keep straight when you see other numbers today. MOAA's COLA Watch says August is "3.5% above the COLA baseline," which is true for August alone; the running count averages July in and lands at 3.3%. And the CPI-W's 12-month change (3.5%) is a different comparison entirely, measured against August 2025 rather than the Q3 2025 average. FedWeek's September 15 "3.5 percent" figure is the August month alone against the Q3 2025 baseline, not the two-month average: a different definition, same data.

The forecasters moved toward each other on the news. The Senior Citizens League trimmed its projection to 3.5% (from 3.6%), and AARP nudged up to 3.6% (from 3.5%). The realistic landing zone is 3.3% to 3.6%. FERS retirees get one point less on the annuity in every one of those outcomes.

August 12, 2026 Update: July Counts, and It Came in Flat

July 2026 CPI-W: 327.104, released this morning. Two ways to read it:

• Against last July: prices are up 3.4% year over year.
• Against the COLA baseline (the Q3 2025 average of 317.265, the number that actually matters): July alone runs +3.10%.

The 3.8% TSCL and 3.6% AARP projections from early summer now need genuinely hot August and September prints to land. The center of gravity is closer to 3.2-3.4%. Above 3%, FERS retirees get CPI-W minus one point; CSRS and Social Security get the full figure. August CPI-W releases September 11; September's, with the official announcement, arrives in mid-October.

July 14, 2026 Update: The Big June CPI Drop, and Why It Doesn't Sink Your COLA

June 2026 CPI-W landed at 327.075, down from May's 328.829. The headline CPI fell 0.4% for the month, the largest single-month drop since April 2020, driven almost entirely by a 5.7% slide in energy prices. Measured against the Q3 2025 baseline of 317.265, the running count now reads 3.1%.

Two things to hold onto. First, the running count is a snapshot, not the forecast: June has zero weight in the official calculation. Second, the forecasters who model the full year barely flinched: TSCL trimmed its projection from 3.9% to 3.8%, and AARP sits at 3.6%. A one-month energy reversal moves the snapshot a lot and the outcome a little. If 3.8% holds through Q3, CSRS and Social Security get 3.8% and FERS retirees get 2.8% under the minus-1-point cap. July CPI-W, out in mid-August, is the first month that actually counts.

June 11, 2026 Update: May CPI-W Pushes the Count to 3.6%

May 2026 CPI-W landed at 328.829, released by the BLS on June 10. Measured against the Q3 2025 COLA baseline of 317.265, that puts the running count at 3.6%, up from the ~3.0% reading after April. The figure does not lock anything in (only July, August, and September 2026 CPI-W count toward the final COLA), but it confirms the upward trend rather than the spring pullback some analysts expected.

The estimate range has widened with it: CBO holds at 3.1%, TSCL sits near 3.9%, and CNBC flagged a scenario reaching as high as 4.7% if summer inflation runs hot. For FERS retirees, the gap between a 3.6% and a 4.7% final number is real money on the annuity, and either way they collect the full, uncapped rate on the Social Security portion of their income. The next data point, June CPI-W, releases July 14.

May 24, 2026 Update: The Estimate Range Widened to 4.2%

Eleven days after the April CPI-W release, the analyst spread widened. Independent Social Security analyst Mary Johnson (formerly TSCL's lead policy analyst, now publishing independently) put her own 2027 COLA projection at 4.2%, the high end of any current estimate. CNBC and 401k Specialist Magazine both led with the 3.9%–4.2% range on May 12.

The estimate range now runs 3.1% (CBO) to 4.2% (Johnson), with TSCL's 3.9% as the most-cited midpoint. Johnson's model weights energy price trajectory more heavily than TSCL's. The next data point, May 2026 CPI-W, releases June 10, 2026 at 8

a.m. ET. That release will not count toward the final calculation (only July, August, and September CPI-W matter) but will shift analyst projections again.

May 13, 2026 Update: The Threshold Is Now Crossed

The big number: April 2026 CPI-W came in at 326.541, released by the BLS on May 12. That's a monthly jump of 0.94%, the second straight large month-over-month gain after March's 1.28% surge. Year-over-year CPI-W is now 3.9%.

Against the Q3 2025 COLA baseline of 317.265, April reads 2.92% above the baseline. FedWeek rounded this to "3 percent" in its headline. The running count crossed a real legal threshold: at 3% or above, FERS retirees move from the 2% flat cap into the CPI-W minus 1 point formula.

What the Senior Citizens League and others say now:

• TSCL raised its 2027 COLA projection from 2.8% (April) to 3.9% (today)
• Mary Johnson (independent, formerly TSCL): 4.2% (May 12, 2026, high end of the range)
• CBO maintains its 3.1% projection
• FedSmith and FedWeek both published same-day coverage of the 3% threshold crossing

What this means in plain English:

Original Data: 2027 COLA Dollar Impact by Annuity Size

What does this actually mean in your monthly check? FedTools modeled the 2027 COLA at four scenario points (a 3.0% floor, the 3.3% two-month running count, TSCL's 3.5%, and AARP's 3.6%) against three typical annuity sizes. Each cell is annuity times the rate, rounded to the dollar:

FedTools 2026 analysis: Anywhere above 3%, the gap is exactly one point of your annuity: a FERS retiree with a $45,000 pension receives $450 less per year than a CSRS retiree at the same benefit level, whether the final number is 3.3% or 3.6%. And that gap compounds in future years because the next year's COLA is calculated off the lower base.

Use the FERS Retirement Calculator to run these numbers against your specific projected annuity.

Note on the October 2025 gap: BLS could not collect October 2025 CPI data during the federal appropriations lapse (Oct 1 – Nov 12, 2025). It is the first missing month in the 100+ year CPI series since 1921. October does not factor into the 2027 COLA calculation regardless, so the gap has no effect on the final number, but it is a permanent data scar worth noting.

Bold months (July, August, September) are the only ones that count for the final 2027 COLA calculation. April's reading establishes the trend but does not directly determine the COLA.

Even a hot September only reaches 3.7%, and a cool one only falls to 3.1%. The range that was 2.5% to 3.9% in May is now six-tenths of a point wide.

How the COLA Calculation Works

The federal retiree COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), published monthly by the Bureau of Labor Statistics.

The formula:

1. Take the average CPI-W for July, August, and September 2026
2. Compare it to the Q3 2025 baseline (average CPI-W for July-September 2025 = 317.265)
3. The percentage increase becomes the COLA for CSRS retirees and Social Security recipients
4. FERS retirees get a modified version based on the cap rules

The running count just crossed 3.0%, which moves FERS retirees from the 2% flat cap into the CPI-W minus 1 formula. At exactly 3.0%, both bucket methods produce the same outcome (FERS gets 2.0% either way). Above 3.0%, the CPI-minus-1 formula becomes gradually more generous than the 2% flat cap, but it always lags CSRS by a full point.

FERS retirees received less than the full COLA in each of the last five years (2022-2026). Under 5 U.S.C. § 8462(b)(1), FERS gets the full COLA only when the increase is 2.0 percent or less. That last happened for the 2020 COLA (1.6 percent) and the 2021 COLA (1.3 percent).

What About Social Security? (Important for FERS Retirees)

Many FERS retirees also receive Social Security benefits, either from federal employment covered by Social Security after 1984, or from prior private-sector work.

Social Security COLAs use the same CPI-W formula as CSRS, with no FERS-style cap. SS recipients always get the full COLA. At a 3.3% COLA, the average retired-worker benefit of $2,087.52/month (SSA Monthly Statistical Snapshot, August 2026) would rise about +$69/month.

This is meaningful for retirement income math. A FERS retiree with a $35,000 pension AND $18,000 in annual SS benefits gets:

• FERS pension: +$805/year at the 3.3% running count (capped to 2.3%)
• SS benefit: +$594/year (full 3.3%, uncapped)
• Combined gain: +$1,399/year, more than a CSRS-only retiree with the same $35,000 pension ($1,155)

If you have substantial SS in addition to your FERS pension, the diet COLA bites less than the headline 1-point gap suggests.

What Could Change This: The Equal COLA Act

The 2026-05-12 news cycle gave the Equal COLA Act renewed visibility. If enacted, H.R. 491 / S. 624 would eliminate the FERS diet COLA cap entirely. FERS retirees would receive the full CPI-W amount.

• H.R. 491: 44 House co-sponsors (all Democrats), referred to committee, no floor vote scheduled
• S. 624: 10 Senate co-sponsors, same status
• GovTrack enactment probability: ~9% in the 119th Congress
• Endorsers: NARFE, NTEU, AFGE, NFFE, AFSCME, FMA, IAFF, IFPTE

The bill has never passed committee in any prior Congress. The main obstacle is the fiscal cost: eliminating the cap permanently adds an estimated $4-$5 billion per year to federal retirement spending at current COLA levels.

For deeper coverage, see our Equal COLA Act: End the FERS Diet COLA post.

What This Means for Your Retirement Planning

If you're still working: The COLA cap is one more reason to maximize TSP contributions. Your FERS pension won't fully keep up with inflation in any year CPI-W exceeds 2%. The TSP, invested for growth, has historically outpaced inflation over the long term.

If you're already retired: The 2027 COLA is determined by Q3 CPI-W. You can't influence it. But you can plan your spending and TSP withdrawal strategy around what's coming. If you've been assuming a 2% COLA, the 3.3% running count adds roughly $67 to $165 per month to your check depending on your system and annuity size. That extra income can change RMDs and tax bracket planning.

For a deeper look at retirement income strategy, see our FERS Retirement Income guide.

Estimate Your FERS Pension Under 2027 COLA Scenarios

The FERS Retirement Calculator models your annuity under different COLA assumptions. Seeing the 20-year compound effect of a 2% vs 3% vs 3.9% COLA can change how you think about retirement savings.

Estimate Your FERS Pension →

Frequently Asked Questions

What is the 2027 COLA estimate for federal retirees?

Two-thirds of it is now locked. July CPI-W came in at 327.104 and August at 328.481, so the two-month average of 327.793 runs 3.3% above the Q3 2025 baseline of 317.265. A flat September, meaning September reprints August's 328.481, averages 328.022 and rounds to 3.4%; a hot September pushes it to 3.5-3.7%. TSCL projects 3.5% and AARP 3.6%. The official number is announced October 14, 2026. Above 3%, FERS retirees receive the CPI-W figure minus one point, so 3.3% pays FERS 2.3%.

Why is there no October 2025 data in the CPI-W tracker?

BLS could not collect October 2025 CPI data during the federal appropriations lapse (October 1 to November 12, 2025). It is the first missing month in the 100-plus-year CPI series since 1921. October 2025 does not factor into the 2027 COLA calculation regardless, since only July, August, and September 2026 CPI-W determine the final number, so the gap has no effect on the COLA. It is a permanent data scar in the historical series.

When is the next CPI-W release?

September 2026 CPI-W, the last of the three counting months, releases October 14, 2026 at 8

a.m. ET, and Social Security is expected to announce the official 2027 COLA the same morning (SSA has not posted a 2027 announcement date). July (327.104) and August (328.481) are already in the books. In 2025 a government shutdown pushed the same release to October 24; that risk is off the table this year, because the Continuing Appropriations and Extensions Act, 2027 (H.R. 6500, Public Law 119-103, approved September 2, 2026) funds the government through December 11, 2026.

How is the federal retiree COLA calculated?

The average CPI-W for July through September 2026 is compared to the Q3 2025 baseline of 317.265. The percentage increase becomes the full COLA for CSRS retirees and Social Security. FERS retirees get a reduced COLA if the increase exceeds 2%, capped at 2% in the 2-3% zone or at CPI-W minus 1 point above 3%.

Why do FERS retirees get a smaller COLA than CSRS retirees?

FERS COLAs are capped under 5 U.S.C. § 8462. If CPI-W is 2% or less, FERS gets the full amount. If 2% to 3%, FERS is capped at 2%. If above 3%, FERS gets CPI-W minus 1 percentage point. In 2026, CSRS received 2.8% but FERS only received 2.0%. At the current 3.3% running count, FERS retirees would receive 2.3% while CSRS and Social Security receive 3.3%, a 1 point gap.

How much extra will I get in 2027 at the 3.3% running count?

At a 3.3% COLA, a CSRS retiree with a $35,000 annuity gains $1,155/year. A FERS retiree with the same $35,000 annuity gets the capped 2.3% rate, gaining $805/year. The FERS-CSRS gap is $350/year, $450/year on a $45K annuity, $600/year on a $60K annuity. FERS retirees who also receive Social Security get the full COLA on the SS portion (no FERS cap applies to SS).

When will the 2027 COLA be announced?

Mid-October 2026, after the September CPI-W release. Only July, August, and September CPI-W data determines the final COLA. Earlier-month data establishes the trend but does not count toward the official calculation.

What could change the trajectory between now and October?

Three things. (1) Energy prices: April's gas-up-5.4%-monthly surge could ease if Middle East tensions de-escalate. (2) Shelter costs: still rising 0.6% monthly but slowing. (3) The Equal COLA Act (H.R. 491 / S. 624) would eliminate the FERS diet COLA cap entirely. It has 44 House and 10 Senate co-sponsors but has never passed committee. Enactment probability is roughly 9% per GovTrack.

Related Resources

• One CPI Number, Five Different Raises: How the same 3.3% pays Social Security, CSRS, FERS, military retired pay, and VA disability differently
• FERS Retirement Calculator: Model your pension under different COLA scenarios
• Equal COLA Act: End the FERS Diet COLA: Legislative status and 30-year dollar cost of the cap
• FERS vs CSRS Comparison 2026: How the two retirement systems differ
• FERS Retirement Income (Pension + TSP + SS): Coordinating three income streams
• 2027 Federal Pay Raise Outlook: For active employees, not retirees
• Best Dates to Retire 2026: Optimize your retirement date

Sources:

• SSA Monthly Statistical Snapshot, August 2026 (average retired-worker benefit)
• BLS CPI Release (August 2026 data)
• BLS CPI-W series CWUR0000SA0 (index values used in the tracker)
• Senior Citizens League COLA Watch (3.5%, September 2026)
• AARP 2027 COLA estimate (3.6%, September 2026)
• FedWeek: COLA Count Hits 3 Percent (May 12, 2026)
• FedSmith: Higher Inflation Last Month, Bigger 2027 COLA (May 12, 2026)
• MOAA COLA Watch
• NARFE COLA Update
• Senior Citizens League COLA Watch
• CBO 2027 COLA Projection
• OPM FERS COLA Information
• Congress.gov H.R. 491 (Equal COLA Act)
• Congress.gov S. 624 (Equal COLA Act)

Sources updated October 8, 2026. Dollar projections use the OPM COLA formula and the July and August 2026 CPI-W indexes; the final 2027 COLA depends on the September 2026 reading.