Guide to Federal Retiree COLAs: What Are They and How Are They Calculated?

Written by Edward A. Zurndorfer, CERTIFIED FINANCIAL PLANNER®. Updated for 2026 by My Federal Retirement.

Key Takeaways

For the latest projection of next year’s adjustment, see the Current Year Federal Retiree COLA Watch.

With much discussion with respect to the high cost of living due to surging inflation, there is a recurring question among many federal retirees as to the amount of the cost-of-living adjustment (COLA) that CSRS and FERS annuitants and survivor annuitants will receive.

This guide covers what the COLA is, how it is calculated, and how it affects CSRS and FERS annuities, survivor annuities, and other federal employee death benefits. The mechanics below don’t change from year to year — only the percentage does — so the worked examples use a recent COLA year to illustrate the math, with a current 2026 example included as well.

Key Terms

• Base Quarter. The calendar quarter beginning July 1 and ending September 30 of any year.
• Consumer Price Index for Workers (CPI-W). The index published by the Bureau of Labor Statistics that reflects changes in consumer prices for urban wage earners and clerical workers — food and beverages, housing, apparel, transportation, medical care, recreation, education, communication, and other goods and services.
• Base quarter price index. The arithmetical mean of the CPI-W for the three months comprising the base quarter — July, August, and September.
• Cost-of-living adjustment (COLA). An increase applied to an annuity based on the increase in the base quarter price index between consecutive base quarters.
• Effective date. COLAs are effective on December 1 of the year in which an annuitant becomes eligible. The increase is reflected in the CSRS and FERS annuity checks payable in January following the effective date.
• Annuity commencing date. The date an annuity first begins to accrue.

How CSRS (and Social Security) COLAs Are Calculated

CSRS/CSRS Offset annuitants and Social Security disability and retirement benefit recipients receive the same COLA. The amount of the COLA is determined each year by the percent change in the base quarter price index from the previous year to the base quarter price index of the current year, adjusted to the nearest 1/10 of one percent.

Illustrative example (using a recent COLA year): The 2022 COLA for CSRS/CSRS Offset annuitants and Social Security benefit recipients (effective Dec. 1, 2021) was 5.9 percent, determined as follows:

The percentage increase in the average CPI-W from the third calendar quarter of 2020 to the third calendar quarter of 2021 is calculated as:

(268.421 − 253.412) / 253.412 × 100 = 15.009 / 253.412 × 100 = 5.9%

Therefore, the 2022 COLA equaled 5.9 percent, effective Dec. 1, 2021.

A CSRS/CSRS Offset annuitant’s new gross monthly annuity (reflecting the COLA) is calculated by multiplying the previous year’s gross monthly annuity by the COLA factor (one plus the COLA percentage). The new gross monthly annuity is the annuity payable before adjustments have been made (when applicable) for:

1. Reduction for the cost of a CSRS survivor annuity benefit;
2. Reduction for early (pre-age 55) retirement;
3. Reduction for unpaid deposit service performed before Oct. 1, 1982; and
4. Reduction for unpaid redeposit for service ending prior to Mar. 1, 1991.

The new gross CSRS monthly annuity is always rounded to the nearest dollar. The new gross monthly annuity after a COLA is applied must reflect an increase of at least $1.00.

Example 1. Jim, a CSRS annuitant, retired from federal service in 2014. During 2021, Jim’s monthly CSRS net annuity was $4,500 after a survivor annuity cost of $500 and an unpaid deposit of $100 was deducted. Jim’s CSRS gross monthly annuity during 2021 was therefore $4,500 + $500 + $100, or $5,100. Effective Dec. 1, 2021, Jim was eligible to receive the full 5.9 percent COLA, which first showed up in his annuity check dated Jan. 1, 2022:

$5,100 × 1.059 = $5,400 (rounded to the nearest dollar)

Jim’s net CSRS annuity starting Jan. 1, 2022: $5,400 − $500 − $100 = $4,800.

Note: the annual COLA is applied before withholdings are made for federal and state income taxes, and health, life, dental, vision, and long-term care insurance premiums. Upon applying the COLA factor, the CSRS gross annuity is always rounded to the next lower dollar.

Current example: How the 2026 COLA applies

Using the same method with this year’s figures: a CSRS annuitant with a gross monthly annuity of $5,100 receiving the 2026 COLA of 2.8 percent would see:

$5,100 × 1.028 = $5,242.80 → $5,242 (rounded down to the nearest dollar)

When Does a CSRS Annuitant Receive Their First COLA?

No matter at what age a CSRS/CSRS Offset employee retires from federal service, they are eligible for their first COLA effective the December 1 following the month of the same year they retire. However, the amount of the annuitant’s first-year COLA will be prorated, based on the number of months from the commencement date of the annuity until the effective date of the first COLA after the annuity commencement date.

Example 2. Judy is a CSRS annuitant who retired from federal service on Jan. 2, 2021. The commencement date of Judy’s annuity was Jan. 3, 2021, and she received her first CSRS annuity check dated Feb. 1, 2021. Judy therefore received 11 CSRS monthly annuity checks between Jan. 3, 2021 and Dec. 31, 2021 (Feb. 1 through Dec. 1). She was eligible to receive 11/12 of the 2022 COLA of 5.9 percent:

11/12 × 5.9% = 5.4% (Judy’s 2022 COLA amount)

Example 3. Jim is a CSRS annuitant who retired from federal service on May 31, 2021. His annuity starting date was June 1, 2021, and he received his first CSRS annuity check on July 1, 2021. Between June 1, 2021 and Dec. 31, 2021, Jim received 6 CSRS annuity checks. He was eligible to receive 6/12 of the 2022 COLA of 5.9 percent:

6/12 × 5.9% = 2.9% (Jim’s 2022 COLA amount)

Amount of COLA for CSRS Survivor Annuitants

A CSRS survivor annuity payable to a deceased annuitant’s surviving spouse, former spouse, or an insurable interest (a relative closer than a first cousin, such as a child, sibling, or parent) commences the day after the annuitant’s death. A CSRS survivor annuitant is eligible to receive all or some of the first-year COLA starting January 1 following the year of the annuitant’s death. The amount depends on when the annuitant died relative to their own COLA history:

• If the annuitant died any time after receiving their first COLA, the survivor annuity’s first-year COLA is not prorated.
• If the annuitant had not yet received their first COLA, or died while still in federal service, the survivor annuitant’s first COLA is prorated based on the starting date of the survivor annuity.

Example 4. Jessica retired from federal service on Nov. 30, 2019. She received her first CSRS annuity check dated Jan. 1, 2020, continued receiving checks through 2020, and received a 2.0 percent COLA effective Dec. 1, 2020. Jessica died unexpectedly in March 2021. Her surviving spouse, Howard, received his first CSRS survivor annuity check on Apr. 1, 2021, and received the full 5.9 percent COLA effective Dec. 1, 2021 (first appearing Jan. 1, 2022) — no proration, since Jessica had already received her first COLA.

Example 5. Barry retired from federal service under CSRS on Feb. 27, 2021, and died on Aug. 5, 2021 after receiving 5 CSRS annuity checks. His wife Joan received her first CSRS survivor annuity check dated Sept. 1, 2021, and was entitled to a COLA effective Dec. 1, 2021 — but since Barry had not yet received his own first COLA, it was prorated:

5.9% × 4/12 (Sept. 1, Oct. 1, Nov. 1, Dec. 1) = 1.9% (Joan’s 2022 survivor annuity COLA)

Starting with the 2023 COLA, Joan became eligible for the full CSRS COLA.

Other Provisions Regarding CSRS COLAs

• While a CSRS annuitant is living, the same COLA applied to the CSRS annuity is applied to the survivor annuity.
• The law does not provide for the annual COLA to be applied to the annuity purchased through the Voluntary Contribution Program (VCP).
• A reemployed CSRS annuitant’s salary is offset by the amount of the CSRS annuity. When a COLA is applied, the employing office must impose an additional salary offset, effective December 1 of the year of the COLA.

Children Survivor Annuities

Upon the death of a federal employee or annuitant, eligible children — unmarried children under age 18, or between 18 and 22 and full-time students — are eligible to receive children’s survivor annuities. These are increased by COLAs effective December 1 every year and are payable starting in the January annuity check. Unlike other annuitant COLAs, children’s COLAs are not prorated for the first year — regardless of when in the year the employee or annuitant dies, the child survivor annuity receives the full COLA effective the following December.

The COLA is based on the annuity payable before deductions such as the FEHB health insurance premium. A CSRS COLA is also applied to the child survivor annuity received by a child of a deceased CSRS or FERS employee or annuitant.

How FERS COLAs Are Determined

FERS COLAs use the same base-quarter CPI-W method as CSRS, with two key differences:

1. Depending on the amount of the CSRS COLA, the FERS COLA may be the same or less; and
2. With some exceptions, FERS employees who retire before age 62 do not receive their first COLA until the year after they turn 62.

The following table summarizes the FERS COLA in relation to the CSRS COLA:

Illustration: for the year 2021, the CSRS COLA was 2.0 percent, and FERS annuitants over age 62 received the same 2.0 percent. For 2022, the CSRS COLA was 5.9 percent, and FERS annuitants over age 62 received 4.9 percent (5.9% − 1.0%). Using this year’s figures: the 2026 CSRS COLA of 2.8 percent falls in the “2.0% to 3.0%” band, so the 2026 FERS COLA is 2.0 percent.

Note: legislation has periodically been introduced in Congress that would make the FERS COLA equal to the CSRS COLA regardless of amount. See the Equal COLA Act for the current status of that proposal.

The FERS COLA is applied to the FERS gross annuity before the following deductions:

1. Reduction for a FERS survivor annuity; and
2. Reduction resulting from an immediate or postponed “MRA+10” or “MRA+20” retirement provision.

A FERS employee who retires before age 62 under an immediate retirement (regular, “MRA+10,” or “MRA+20”) or leaves federal service for a deferred retirement is not eligible to receive their first FERS COLA until the year after they turn 62. Exceptions include:

• Disability annuitants, including military reserve technicians medically disqualified from the military service required to hold their position (though those receiving 60 percent of average salary from the second year of FERS disability retirement through age 61 do not receive COLAs).
• Military reserve technicians separated due to loss of military membership or rank from a disability after age 50 with 25 years of service.
• Employees who retire under special provisions classifications — law enforcement officers, firefighters, and air traffic controllers.
• Surviving spouses, former spouses, and “insurable interest” individuals receiving survivor annuities.

FERS annuitants receive their first COLA on January 1 following the year they turn 62. This first-year COLA is not prorated based on when during the year they turned 62.

Example 6. Frank retired from federal service in 2019 at age 60. His FERS annuity received no COLAs in 2019, 2020, or 2021. Frank turned 62 in July 2021. His FERS annuity received its first COLA (4.9 percent) on Jan. 1, 2022 — not prorated, despite turning 62 mid-year.

Example 7. Carol retired from federal service under FERS on Dec. 31, 2020 at age 63, with 20 years of service. Her starting FERS annuity was $19,800 net, after subtracting a $2,200 survivor annuity cost for her husband — a gross annuity of $22,000 per year during 2021. On Jan. 1, 2022, Carol received her first COLA of 4.9 percent:

$22,000 × 1.049 = $23,078 (Carol’s 2022 gross annuity)

$23,078 − $2,200 = $20,878 (Carol’s net annuity during 2022)

“Trans” FERS employees — those who transferred from CSRS to FERS during one of the two FERS open seasons (1987–88 and 1998) — are eligible to receive both a CSRS and FERS annuity when they retire under FERS. The CSRS component is subject to CSRS COLA rules and does not require the annuitant to be age 62. However, a Trans FERS employee who retires before age 62 must wait until January 1 of the year following the year they turn 62 to receive a COLA on the FERS component of their retirement.

Frequently Asked Questions

When do I get my first COLA as a CSRS retiree?
The December 1 following the year you retire, prorated based on how many monthly annuity checks you received before that date.

Why is my FERS COLA smaller than the CSRS COLA?
By law, when the CSRS COLA is between 2.0% and 3.0%, FERS annuitants receive a flat 2.0%. When the CSRS COLA exceeds 3.0%, FERS annuitants receive the CSRS COLA minus 1.0 percentage point.

Do survivor annuitants get the full COLA in the first year?
Only if the original annuitant had already received at least one COLA before dying. Otherwise, the survivor’s first-year COLA is prorated based on the survivor annuity’s start date.

Do children’s survivor annuities get prorated in the first year?
No. Unlike other survivor annuities, children’s survivor annuities receive the full COLA the first December after eligibility begins, regardless of when during the year the employee or annuitant died.

Can a FERS retiree under age 62 receive any COLA at all?
Generally no, with exceptions for disability retirees (with limitations), certain military reserve technicians, special provisions retirees (law enforcement, firefighters, air traffic controllers), and survivor annuitants.