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The 2027 federal retirement COLA is currently tracking at about 3.3%, with two of the three months of inflation data now available. Some forecasts are putting the final number closer to 3.5%, but the official COLA won’t be known until September’s data is released.

That final piece of the puzzle is scheduled for October 14, when the Bureau of Labor Statistics releases September’s Consumer Price Index data.

Where the 2027 COLA Number Comes From

The 2027 federal retirement COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.

The calculation compares the average CPI-W for July, August, and September with the average for the third quarter of the previous year. The 2025 third-quarter average was 317.265.

So far:

July and August average 327.793, producing a running COLA calculation of about 3.3%. September’s number could still move the final result higher or lower. BLS reported the August CPI-W at 328.481.

CSRS Gets the Full COLA. FERS Doesn’t.

This is where the headline number and the increase on a retirement check can be different.

For CSRS retirees, the full COLA applies. FERS uses a separate formula:

• If inflation is 2% or less, FERS gets the full increase.
• If inflation is more than 2% but no more than 3%, FERS gets 2%.
• If inflation is more than 3%, FERS gets the inflation increase minus 1 percentage point.

So if the final 2027 federal retirement COLA is 3.5%, a CSRS retiree would receive 3.5%, while an eligible FERS retiree would receive 2.5%.

Age Matters for FERS

The 2027 federal retirement COLA also doesn’t automatically apply to every FERS retiree.

Most FERS retirees don’t receive COLAs until age 62. There are exceptions for certain disability retirees, survivor benefits, and special retirement provisions.

So a projected 3.5% COLA doesn’t necessarily mean every FERS retiree will see a 2.5% increase.

How 2027 Compares With Recent Years

The 8.7% increase in 2023 was an outlier. The following three years were considerably lower. If the 2027 COLA ultimately lands around 3.5%, it would be larger than the increases retirees received in the past three years.

What Federal Retirees Should Watch

For now, 3.3% is the running calculation, while roughly 3.5% is one estimate for where the final number could land. September’s CPI-W reading will determine where the number finishes.

And for FERS retirees, the headline number isn’t necessarily the number that matters most. The FERS formula, along with age and retirement circumstances, determines what an individual actually receives.

In other words, don’t just watch the 2027 federal retirement COLA. Watch the formula behind it and how that formula applies to your retirement system. Schedule an appointment with a Federal Retirement Consultant (FRC®) to make sure you’re maximizing your federal benefits.