The FERS diet COLA 2027 is 2.6%, while CSRS annuities and Social Security benefits both rise 3.6%. The one-point gap comes from the FERS COLA formula: when inflation tops 3%, FERS retirees get the CPI-W increase minus one percentage point. Most nondisabled FERS retirees also receive no COLA at all on their annuity until age 62.
For advisors, this is one of the most reliable "did you know" moments in a federal client meeting. Many FERS employees assume their pension keeps pace with inflation the way their Social Security benefit does. It does not, and the difference compounds over a retirement that can easily last 25 or 30 years.
The FERS Diet COLA 2027 Numbers
The official 2027 figures are now set. According to OPM's cost-of-living adjustment FAQ and the Congressional Research Service's October 14, 2026 update on civil service COLAs, the adjustment effective December 1, 2026 is:
COLAs effective December 2026, first paid January 2027
3.6%
CSRS annuities
2.6%
FERS annuities
3.6%
Social Security benefits
The Social Security Administration announced its 3.6% increase on October 14, 2026, for roughly 72 million beneficiaries. The CSRS COLA and the Social Security COLA are measured the same way, so they match. The FERS COLA is measured the same way too, but it then runs through a different formula.
A few timing details matter when you review a client's statement. The COLA takes effect December 1 and shows up in the January payment. Retirees who have been on the annuity roll for less than a full year receive a prorated COLA based on their annuity commencing date. OPM also notes that the minimum COLA increase under both CSRS and FERS is $1 per month.
How the FERS COLA Formula Works
Every federal COLA starts with the same measurement: the average change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of one year to the third quarter of the next. CSRS retirees and Social Security beneficiaries receive that full percentage. FERS retirees receive a "diet" version:
| CPI-W increase | FERS COLA |
|---|---|
| Less than 2.0% | Full CPI-W increase |
| 2.0% to 3.0% | 2.0% |
| More than 3.0% | CPI-W increase minus 1 percentage point |
This year the CPI-W measurement produced 3.6%, which lands in the top band. FERS retirees therefore receive 3.6% minus one point, or 2.6%.
The middle band is the one clients understand least. When inflation runs between 2% and 3%, the FERS COLA is flat at 2%. That is why the CRS table shows FERS at exactly 2.0% for the COLAs effective in December 2024 and December 2025, when CSRS received 2.5% and 2.8%.
The Age-62 Rule and Its Exceptions
The formula is only half the story. FERS COLAs generally do not apply to retirees under age 62. A client who retires at their minimum retirement age with 30 years of service at 57 can go about five years with a flat basic annuity.
OPM's annual changes guidance (Benefits Administration Letter 26-101) lists the groups that receive FERS COLAs before 62:
- Spouse, former spouse and insurable interest survivor annuitants
- Certain disability annuitants (a disability annuitant receiving the 60% rate during the first year on the disability roll does not receive a COLA)
- Retirees under the special provisions for law enforcement officers, firefighters and Capitol Police
- Retirees under the special provisions for air traffic controllers
- Certain military reserve technicians who retired under the special provision because they lost military membership on account of disability
Two related points come up often in client meetings:
- The annuity supplement never gets a COLA. OPM states that FERS COLAs apply to the basic annuity, not to the annuity supplement. Clients who retire before 62 with the supplement should expect that portion of their income to stay level until it stops at 62.
- Exceptions still get the diet formula. CRS notes that all COLAs paid under FERS are limited when inflation exceeds 2%. A survivor or a special-provision retiree may receive a COLA before 62, but it is still 2.6% for 2027, not 3.6%.
How the One-Point Gap Compounds
Here is the part that turns a technical footnote into a planning conversation. A one-point difference sounds small in any single year. Over a long retirement, it adds up.
Look at the last six COLAs from the CRS table:
| COLA effective | CSRS / Social Security vs. FERS |
|---|---|
| Dec. 2021 | 5.9% vs. 4.9% |
| Dec. 2022 | 8.7% vs. 7.7% |
| Dec. 2023 | 3.2% vs. 2.2% |
| Dec. 2024 | 2.5% vs. 2.0% |
| Dec. 2025 | 2.8% vs. 2.0% |
| Dec. 2026 | 3.6% vs. 2.6% |
Apply those actual percentages to a hypothetical $3,000 monthly annuity that was eligible for every one of them. With the full CPI-W COLAs, the benefit would have grown to about $3,890 a month. With the FERS COLAs, it grew to about $3,698. That is a gap of roughly $193 a month, or more than $2,300 a year, after just six adjustments. The math is illustrative, not a forecast. Future COLAs depend on future inflation.
The same pattern shows up in the 2027 numbers alone. On that $3,000 annuity, a 3.6% COLA adds $108 a month, and a 2.6% COLA adds $78. Social Security, by contrast, receives the full 3.6%, which is one reason the Social Security piece of a FERS client's plan carries more of the inflation protection than many clients realize.
Why This Matters in a FERS Client Meeting
The diet COLA is not a reason for alarm. It is a reason for planning. Several practical conversations follow from it:
- Retirement timing. For a nondisabled FERS retiree, retiring well before 62 means years with no COLA on the basic annuity and a supplement that never receives one. That doesn't make early retirement wrong, but clients should see the math before they choose a date.
- Income layering. Social Security and the FERS annuity respond differently to inflation. When the timing of Social Security claiming fits a client's overall plan, it can affect how much of their lifetime income has full CPI-W protection.
- Thrift Savings Plan and other savings. If part of a client's spending needs to grow with inflation, the portfolio may have to make up some of what the FERS annuity doesn't. That's a planning assumption to document, not a product recommendation.
- Survivor planning. Survivor annuitants receive COLAs regardless of age, but under the same FERS formula. When a client compares survivor benefit options, the survivor annuity should be modeled with the diet COLA as well.
Avoid overstating any of this. Every client's situation is different, and the right answer depends on their service history, health, other income and goals. The value you add is making sure the client understands how their federal benefits actually behave before they make an irreversible decision.
Where the Equal COLA Act Stands
Clients sometimes ask whether Congress will "fix" the diet COLA. The honest answer is that a fix has been proposed but not enacted.
The Equal COLA Act would give FERS retirees the same COLA as CSRS retirees. As of October 28, 2026:
- H.R. 491 was introduced January 16, 2025 and referred to the House Committee on Oversight and Government Reform. It has 90 cosponsors.
- S. 624 was introduced February 18, 2025 and referred to the Senate Committee on Homeland Security and Governmental Affairs. It has 20 cosponsors.
Neither bill has passed either chamber. Until a law changes the formula, plan around the rules that exist today. If a client wants to follow the bills, congress.gov is the primary source for their status.
Building This Into Your Practice
The diet COLA is a good example of why federal clients need an advisor who knows their system. A generic retirement projection that applies one inflation rate to every income source will overstate a FERS client's future pension. An advisor who models the FERS COLA formula correctly, who knows the age-62 rule and its exceptions, and who can explain the difference in plain language earns credibility quickly.
If you are building a federal practice, this is exactly the kind of detail covered in depth in the FedEd Academy™ live program, alongside FEHB, FEGLI, TSP and survivor benefits. Advisors who want a credential that shows that knowledge can explore the RFBS℠ designation. For more on why general planning training leaves gaps with federal clients, read why CFP® training alone does not cover federal benefits.
Federal clients rarely ask about the COLA formula until it surprises them. Be the advisor who explains it first: 2.6% for FERS, 3.6% for CSRS and Social Security, and a plan that accounts for the difference.
Frequently asked questions
What is the 2027 COLA for FERS retirees?
OPM lists the 2027 FERS COLA at 2.6%, effective December 1, 2026 and first paid in the January 2027 annuity payment. CSRS annuities and Social Security benefits both increase 3.6%.
Why is the FERS COLA lower than the CSRS COLA?
Under the FERS formula, when the CPI-W increase is above 3%, the FERS COLA equals the CPI-W increase minus one percentage point. When the CPI-W increase is between 2% and 3%, the FERS COLA is capped at 2%. Below 2%, FERS retirees receive the full CPI-W increase. CSRS has no such reduction.
Do FERS retirees under age 62 get a COLA?
Generally no. OPM explains that FERS COLAs generally do not apply to annuitants under age 62. Exceptions include survivor annuitants, certain disability annuitants, and those who retired under the special provisions for law enforcement officers, firefighters, air traffic controllers, Capitol Police, and certain military reserve technicians.
Does the COLA apply to the FERS annuity supplement?
No. OPM states that FERS COLA increases apply to the retiree's basic annuity and not to the annuity supplement.
Has Congress changed the FERS diet COLA?
Not as of October 28, 2026. The Equal COLA Act, H.R. 491 and S. 624, would give FERS retirees the same COLA as CSRS retirees, but both bills remain in committee and neither has passed either chamber.