A 3.6% COLA Increase Is Coming in 2027: How Much Extra Is Hitting Your Paycheck?

Military retirees, veterans, and surviving family members will see a 3.6% bump in their monthly pay beginning in January. On October 14, 2026, the Social Security Administration announced the cost-of-living adjustment (COLA) for government pay and benefits that will affect military retirees, veterans receiving VA disability pay, and surviving family members receiving benefits.

The 2027 increase is larger than the 2.8% COLA for calendar year 2026. “Social Security benefits and Supplemental Security Income (SSI) payments for 76 million Americans will increase 3.6 percent in 2027,” the Social Security Administration said in an October 14, 2026, statement.

Where the 3.6% Raise Comes From

The annual COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is maintained by the Bureau of Labor Statistics. The annual adjustment is intended to ensure pay and benefits keep pace with inflation, and is an estimate based on the rate of change from the previous year. To calculate the 2027 COLA, the average CPI-W for the third quarter of the calendar year (July, August, and September) is compared to that same period in the previous year (2025).

For 2026, the third-quarter CPI-W average was 328.746, up from 317.265 for the same time period in the previous year. The percent change from 2025 to 2026 then is the amount of the adjustment for 2027. Military pay adjustments follow the same procedure, unless Congress authorizes a specific pay raise that’s different.

Historically, COLA increases have varied significantly depending on economic conditions. In 2021 and 2022, there were large increases because of a spike in inflation driven by the post-COVID-19 economic rebound: +5.9% and +8.7%, respectively. Those were unusual, and since 2000 the COLA has been as low as 0% but generally ranged between 1.5% and 2.8%.

Retirees can view their updated payment in their December Retiree Account Statement once DFAS processes the adjustment.

How the Increase Applies to Your Benefits

How the change affects your paycheck depends on your specific benefit category. The increase actually takes effect on December 1, 2026, so the first pay adjustment occurs on the next pay date, which for most will be in January.

Military retirees will receive an increase in their pay in their December 31, 2026 paycheck. Retirees under the “High 3” system will receive the full COLA increase. Retirees under the Career Status Bonus/REDUX system will receive the COLA minus one percentage point (2.6%). If you retired in 2026, your adjustment will be prorated based on the quarter in which you retired. You can view the DFAS partial/prorated COLA guidelines here.

Increases to Veterans receiving disability compensation are not automatic and tied to the CPI-W like retired pay. Instead, increases require legislation to change the rates. Like last year with S.2392, Senator Jerry Moran (R-KS) introduced a bill (S.4487) in May of this year that would increase disability and Dependency and Indemnity Compensation (DIC) by the approved COLA percentage. The bill is now awaiting action in the full Senate.

Survivor Benefit Plan and Social Security recipients will see their monthly payments increase by the approved COLA rates with an effective date of January 1, 2027. Veterans receiving Combat-Related Special Compensation (CRSC) and Concurrent Retirement and Disability Pay (CRDP) payments will see those payments rise as well, since they are computed from adjusted VA and retired pay.

Medicare Part B beneficiaries, including TRICARE for life beneficiaries, should pay close attention to the 2027 Part B premium announcement in November. Because Part B premiums are deducted directly from Social Security payments, an increase in premiums can put a dent in the COLA.

Where to Find the Updated Rates

If you are receiving retired pay, disability, DIC, SBP, or Social Security, you can expect your paycheck to be 3.6% larger in January. The Social Security Administration posts COLA updates to its website here. The VA typically posts the new rate tables at va.gov shortly after enactment, and DFAS will publish updated retired pay figures on its website and in myPay.