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The Official 2026 Raise: 5 Key Facts Government Retirees MUST Know About Their COLA

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The question of whether government retirees will receive a raise in 2026 has been definitively answered, and the official Cost-of-Living Adjustment (COLA) percentages have been set. As of today, December 20, 2025, federal retirees under both the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) can expect an increase in their monthly annuity payments starting with the January 2026 payment.

This confirmed adjustment is a crucial financial update for thousands of retired federal employees, military retirees, and Social Security beneficiaries. While the increase is designed to help maintain purchasing power against inflation, the exact percentage varies significantly depending on which retirement system you fall under, a difference that often surprises annuitants.

The Official 2026 Cost-of-Living Adjustment (COLA) Percentages

The Cost-of-Living Adjustment (COLA) is the mechanism by which the federal government adjusts defined-benefit annuities to account for the rising cost of goods and services. The official percentages for 2026 are now finalized, based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) data from the third quarter of 2025.

  • CSRS Retirees: Will receive a 2.8% increase.
  • FERS Retirees: Will receive a 2.0% increase.
  • Social Security & Military Retirees: Will also receive a 2.8% increase.

This adjustment is not considered a "raise" in the traditional sense, but rather an inflation adjustment to ensure that the purchasing power of your benefits remains stable. For a Civil Service Retirement System (CSRS) annuitant receiving a $3,000 monthly benefit, a 2.8% COLA translates to an additional $84 per month. The difference in the percentages between the two major federal retirement systems is a point of ongoing discussion and is rooted in the original design of the FERS program.

Understanding the FERS "Diet-COLA" Formula

The most significant point of confusion for federal retirees is why the Federal Employees Retirement System (FERS) COLA is consistently lower than the Civil Service Retirement System (CSRS) COLA. This difference is due to the "diet-COLA" formula built into the FERS system.

The FERS system, which covers most federal employees hired after 1983, is a three-tiered benefit structure that includes a Basic Annuity, Social Security, and the Thrift Savings Plan (TSP). Because FERS retirees also receive the full Social Security COLA (which is 2.8% for 2026), their Basic Annuity COLA is intentionally reduced.

The FERS COLA Reduction Rules:

The Office of Personnel Management (OPM) applies a specific set of rules to the FERS Basic Annuity adjustment:

  • If the CPI-W increase is 0% to 2%: FERS retirees receive the full CPI-W increase.
  • If the CPI-W increase is 2% to 3%: FERS retirees receive a flat 2.0%. (This is the scenario for 2026, where the full COLA is 2.8%, so FERS gets 2.0%).
  • If the CPI-W increase is 3% or more: FERS retirees receive the CPI-W increase minus 1%.

For 2026, the full 2.8% COLA falls into the second category, meaning FERS annuitants are capped at a 2.0% increase on their defined-benefit annuities. This structure ensures that the FERS annuity is adjusted, but at a lower rate, because the Social Security component provides the larger, unreduced COLA.

The Mechanics of the COLA Calculation and Payment

The COLA is not a discretionary decision made by Congress each year; it is a mandatory adjustment tied directly to economic data. Understanding the calculation timeline and the entities involved is key to knowing when your money will arrive.

How the 2026 COLA Was Determined

The official COLA percentage is determined by comparing the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter (Q3) of the previous year to the average CPI-W for Q3 of the current year.

  • Measurement Period: July, August, and September (Q3) of the preceding year (2025).
  • Announcement: The Social Security Administration (SSA) and the Office of Personnel Management (OPM) typically announce the final COLA in mid-October, shortly after the release of the September CPI-W data.
  • Effective Date: The COLA is effective in December of the current year.

When Will the 2026 Raise Appear in Your Annuity?

Federal retirees will see the 2026 Cost-of-Living Adjustment reflected in their monthly payment starting with the check they receive in January 2026. This payment covers the benefit period for December. The timing is consistent across Civil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS) annuitants.

It is important for annuitants to monitor their statements from the Office of Personnel Management (OPM) to confirm the new adjusted amount. The COLA is applied automatically, but understanding the calculation provides peace of mind and allows for accurate personal financial planning.

Key Entities and Terms for Topical Authority

To fully grasp the dynamics of federal retirement benefits, it’s helpful to be familiar with the key entities and terms that govern your annuity payments and future adjustments:

  • OPM (Office of Personnel Management): The agency responsible for administering the CSRS and FERS defined-benefit annuities and applying the COLA.
  • CSRS (Civil Service Retirement System): The older retirement system for federal employees, generally those hired before 1984. These annuities receive the full, unreduced COLA.
  • FERS (Federal Employees Retirement System): The newer retirement system, which includes a Basic Annuity, Social Security, and the TSP. The Basic Annuity is subject to the "diet-COLA."
  • CPI-W: The specific inflation index used to calculate the COLA. It tracks the prices of goods and services purchased by urban wage earners and clerical workers.
  • TSP (Thrift Savings Plan): The defined-contribution component of the FERS plan, which is not affected by the COLA but is a critical part of a FERS retiree’s overall income.
  • Annuitant: The official term for a retired government employee receiving an annuity payment.
  • Social Security Administration (SSA): The agency that sets the COLA, which is then adopted by OPM for CSRS and military retirees.
  • Defined-Benefit Annuities: The guaranteed, lifetime payments from the CSRS or FERS Basic Annuity, which are subject to the COLA.

In summary, the answer to "Will government retirees get a raise in 2026?" is a definitive yes, with the exact percentage being 2.8% for CSRS retirees and 2.0% for FERS retirees, a difference driven by the underlying structure of the two retirement systems.

The Official 2026 Raise: 5 Key Facts Government Retirees MUST Know About Their COLA
Will government retirees get a raise in 2026?
Will government retirees get a raise in 2026?

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