Last Updated: August 12, 2026 Reading Time: 8 min
The number that sets every military retiree's 2027 check moved from forecast to fact this morning. July CPI-W came in at 327.104, the first of the three months that count, and it puts the 2027 retired-pay COLA on a 3.1% to 3.5% track. Here is the formula, the running math with real index values, and the proration trap that surprises everyone who retired this year.
The Formula, With Real Numbers
Military retired pay COLAs come from 10 U.S.C. § 1401a: the average CPI-W for the third quarter (July, August, September) over the highest previous third-quarter average. It is the same mechanism Social Security uses, on the same index, announced the same October morning.
The 2025 baseline, from the BLS series itself:
| Month | 2025 CPI-W |
|---|---|
| July 2025 | 316.349 |
| August 2025 | 317.306 |
| September 2025 | 318.139 |
| Q3 2025 average (baseline) | 317.265 |
And the 2026 side, one month in:
| Month | 2026 CPI-W | vs. baseline |
|---|---|---|
| July 2026 | 327.104 (released Aug 12) | +3.10% |
| August 2026 | releases September 11 | — |
| September 2026 | releases mid-October, with the announcement | — |
Where the COLA Lands From Here
July's print was essentially flat against June (+0.01%), which does real work on the projections. Run the three honest scenarios:
| If August and September... | Q3 2026 average | High-3 / BRS COLA | REDUX COLA |
|---|---|---|---|
| Stay flat at July's level | 327.104 | 3.1% | 2.1% |
| Rise 0.2% per month | ~327.8 | 3.3% | 2.3% |
| Rise 0.4% per month | ~328.4 | 3.5% | 2.5% |
The 3.7-3.8% numbers circulating in July came from models built before this print. They are not wrong, but they now require inflation to re-accelerate through late summer. The center of gravity is 3.2-3.4%.
What That Means in Dollars
Monthly increase at a 3.3% COLA, by illustrative retired-pay levels:
| Monthly retired pay | Monthly increase | Annual increase |
|---|---|---|
| $1,500 (junior enlisted 20-year) | $49.50 | $594 |
| $2,500 (senior NCO) | $82.50 | $990 |
| $4,000 (mid-grade officer) | $132.00 | $1,584 |
| $6,500 (senior officer) | $214.50 | $2,574 |
Your exact figure is your gross retired pay times the announced percentage, effective December 1, first paid in the January 2027 DFAS deposit. Model your full stack, retired pay plus VA compensation plus any future GS salary, with our Military Retirement Income Calculator.
Who Gets Full, Who Gets Clipped
High-3 and BRS retirees: the full figure. No caps, no bands. (BRS trimmed the multiplier at retirement, not the COLA afterward.)
REDUX/CSB retirees: minus one point, permanently. The $30,000 Career Status Bonus came with COLA-minus-1% for life. The program closed to new elections January 1, 2018, but its retirees carry the haircut forever, with a one-time catch-up at 62.
The contrast worth knowing if you're a military retiree with FERS friends or a second federal career: FERS retirees face a diet-COLA (capped at 2% in the 2-3% zone; CPI-W minus 1 above 3%), and CSRS/Social Security get the full figure. At a 3.3% announcement, a military High-3 retiree gets 3.3%, a FERS annuitant 2.3%. We track the civilian side in the 2027 COLA tracker for federal retirees.
The First-Year Proration Trap for 2026 Retirees
If you retired (or will retire) during 2026, your first COLA is prorated by quarter under 10 U.S.C. § 1401a(d). The later in the COLA year you retire, the smaller your first adjustment:
- Retired October-December 2025: full COLA
- Retired January-March 2026: roughly three-quarters
- Retired April-June 2026: roughly half... and so on, quarter by quarter
- Retire after September 2026: potentially zero first adjustment; your first full COLA arrives December 2027
This is routinely missed in retirement planning and almost never covered in transition briefs. If your retirement date is flexible around a quarter boundary, the proration schedule is worth a look before you pick it.
Dates That Finish the Number
| Date | Event |
|---|---|
| September 11, 2026 | August CPI-W (counting month 2 of 3) |
| Mid-October 2026 | September CPI-W + official 2027 COLA announcement |
| December 1, 2026 | COLA effective date |
| January 2027 | First higher DFAS payment |
Model Your Full Retirement Income
Use our free Military Retirement Income Calculator to see your retired pay, VA compensation, and concurrent-receipt picture with the COLA scenarios applied. Try it now →
Frequently Asked Questions
What will the 2027 military retiree COLA be?
One-third is locked: July CPI-W runs +3.10% against the baseline. Flat prices land 3.1%; modest inflation lands 3.3-3.5%. Official number mid-October.
Is this the same as the 2027 military pay raise?
No. The pay raise (3.6-7%, NDAA conference pending) covers active-duty basic pay. The COLA covers retired pay and comes from the CPI-W formula, not Congress.
Do REDUX retirees get the full COLA?
No, they get the announced figure minus one percentage point, permanently, as part of the Career Status Bonus trade they elected. The program closed to new entrants in 2018.
When does the money show up?
Effective December 1, 2026; the first increased deposit is the January 2027 DFAS payment.
I retire in November 2026. What's my first COLA?
Likely zero, under the quarterly proration rule for first-year retirees. Your first full COLA would arrive with the December 2027 adjustment. If your date is flexible, check the quarter boundaries.
Related Resources
- 2027 COLA Tracker for Federal Retirees: The civilian companion, updated the same mornings.
- 2027 Military Pay Raise by Grade: The active-duty raise this COLA is often confused with.
- Military Retiree to Federal Civilian: The Dual Pension Path: Stacking a GS career on top of retired pay.
- SBP Calculator: What the survivor benefit costs against the annuity it protects.
Sources: BLS CPI-W series CWUR0000SA0 (index values pulled from the public API, August 12, 2026) · 10 U.S.C. § 1401a · 5 U.S.C. § 8462 (FERS COLA comparison) · DFAS REDUX/CSB guidance