Boosting Benefits and COLAs for Seniors Act: The Impact on Federal Retirees

 

Federal retirees who also receive Social Security may qualify for cost-of-living adjustments (COLAs) on two separate sources of retirement income. But the adjustments follow different rules, and neither necessarily keeps pace with the expenses retirees face. The 2027 COLA is 3.6 percent for Social Security, announced by the Social Security Administration (SSA) on October 14, 2026, which is about $75 more per month for the average retired worker. Retirees under the Civil Service Retirement System (CSRS) receive the same 3.6 percent on their annuities, while eligible retirees under the Federal Employees Retirement System (FERS) receive 2.6 percent. All three adjustments start from the same inflation measure, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which reflects the spending patterns of wage-earner and clerical-worker households. Older Americans spend a larger share of their budgets on health care and housing, categories that have often risen faster than overall prices, and Medicare Part B premiums are deducted from Social Security payments for most beneficiaries.

That mismatch is the problem behind the Boosting Benefits and COLAs for Seniors Act. Sen. Richard Blumenthal (D-CT) introduced S. 3059 on October 27, 2025, and Rep. Nikki Budzinski (D-IL) introduced the House companion, H.R. 5841, the next day, within days of the 2.8 percent COLA announcement for 2026. Both bills would base the Social Security COLA on the higher of the CPI-W or the Consumer Price Index for the Elderly (CPI-E), which weights prices according to the spending patterns of people age 62 and older. An earlier version was introduced in 2024. For a federal retiree, the key point is that the change would affect the Social Security benefit but not the federal retirement annuity.

Two COLAs, one inflation measure

Social Security and federal retirement annuities are adjusted under different laws, but all use the CPI-W as the starting point. The Boosting Benefits and COLAs for Seniors Act would change the inflation measure used for Social Security benefits without changing the existing CSRS and FERS annuity COLA formulas.

Under FERS, eligible retirees receive the full CPI-W adjustment when the increase is 2 percent or less, a 2 percent adjustment when CPI-W rises by more than 2 percent but no more than 3 percent, and one percentage point less than CPI-W when the increase exceeds 3 percent. That formula produces the 2.6 percent FERS COLA for 2027.

Most FERS retirees under age 62 do not receive annuity COLAs. Exceptions include certain disability retirees, survivor annuitants and retirees covered by special provisions, such as certain law enforcement officers and firefighters. Newly retired annuitants may also receive prorated adjustments. The diet COLA rules and the CSRS gap are covered separately.

What the Boosting Benefits and COLAs for Seniors Act would do

The bills would amend the Social Security Act so that the annual COLA is based on whichever produces the higher adjustment, the CPI-W or the CPI-E. The Bureau of Labor Statistics (BLS) does not currently publish an official CPI-E, so the legislation would direct it to develop and publish one each month. Until then, the research version, the Research Consumer Price Index for Americans Age 62 and Older (R-CPI-E), would be used.

The change would apply to Social Security retirement and disability benefits, Special Veterans Benefits and Supplemental Security Income. Under the bill text, it would apply to COLA computation quarters ending on or after September 30, 2026, the third-quarter period used to calculate the 2027 COLA. Because the adjustment would be based on the higher of the two measures, the proposed formula could match or increase the current-law COLA, but not reduce it.

Neither bill has become law, and the official 2027 Social Security COLA remains 3.6 percent. The proposed effective date does not change benefit payments under current law. If Congress eventually enacts the legislation, implementation would depend on the final statutory language and how SSA administers the change.

Reps. Lois Frankel (D-FL) and Seth Magaziner (D-RI) joined Budzinski as original House cosponsors. Senate supporters include Sens. Kirsten Gillibrand (D-NY), Bernie Sanders (I-VT) and Elizabeth Warren (D-MA). Sen. Bob Casey (D-PA) introduced an earlier version, S. 3974, in March 2024 during the 118th Congress. Cosponsor counts and committee activity can change, so the Congress.gov pages linked above are the place to check the latest status.

What it would mean in dollars

The Congressional Research Service (CRS) compared what Social Security COLAs would have been under different inflation measures. For the 2026 COLA, the R-CPI-E would have produced a 3.0 percent adjustment instead of the actual 2.8 percent increase. The example below uses that historical comparison to illustrate how the proposed formula could affect a federal retiree.

Assume a FERS retiree age 62 or older receives a $50,000 annual annuity and $24,000 annually in Social Security before the 2026 adjustments. The example assumes the retiree receives the standard FERS COLA. It is an illustration using historical inflation figures, not a projection of what the legislation would pay in 2027.

In this example, the difference is $48 a year, or $4 per month, entirely from the Social Security benefit. That is consistent with CRS’s estimate that the hypothetical 2026 R-CPI-E adjustment would have added about $4 per month to the average retired worker’s benefit.

The longer-term effect could be larger because annual adjustments build on previous increases. From January 1985 to January 2025, the CPI-W rose about 197 percent and the R-CPI-E about 221 percent, according to CRS. These figures measure the cumulative growth of the inflation indexes, not the actual benefit increases received by an individual retiree. The difference illustrates how relatively small annual variations can accumulate over several decades.

The R-CPI-E tends to run higher because it gives more weight to health care and housing, categories that have often experienced faster price increases. But the difference is not guaranteed in any given year. CRS found that a COLA based on the R-CPI-E would have matched or exceeded the CPI-W-based adjustment in all but six years since 1986. The exceptions included 2021 and 2022. In years when the CPI-W produces the larger adjustment, the proposed legislation would retain the CPI-W result.

BLS cautions that the R-CPI-E is a research measure, not an official index. It collects prices from the same areas, stores and items as the Consumer Price Index for All Urban Consumers (CPI-U) and changes only the spending weights, so it may not fully capture the inflation experienced by retirees, including differences in shopping habits, discounts and other costs. The population is also an imperfect match for Social Security because about one in eight beneficiaries, including surviving children and most disabled workers, is under 62, while a notable share of people age 62 and older have not yet claimed benefits. The BLS R-CPI-E page explains the methodology and its limitations.

What the bills would not change for a federal annuity

CSRS and FERS annuity COLAs are established under civil service law, which uses the CPI-W directly. The Boosting Benefits and COLAs for Seniors Act would amend the Social Security Act, and the bill text includes a provision preserving adjustments under other laws that are tied to the Social Security COLA percentage.

The legislation therefore would not change the existing civil service COLA formulas. For 2027, the announced 3.6 percent CSRS COLA and 2.6 percent FERS COLA would remain unchanged by this proposal. The separate Equal COLA Act (H.R. 491 and S. 624) is aimed at eliminating the difference between the CSRS and FERS COLA formulas.

Federal retirees who receive both an annuity and Social Security, including many FERS retirees and CSRS Offset retirees, would experience any increase from the CPI-E legislation through their Social Security benefits rather than their federal annuities. The distinction matters because the two income sources are governed by separate COLA rules, even though both currently use the CPI-W as their inflation benchmark.

Cost and open questions

• The legislation contains no offsetting revenue or spending cuts. Larger Social Security COLAs would increase benefit expenditures, with the additional costs potentially growing over time as future adjustments build on earlier increases.
• BLS has not established the R-CPI-E as an official inflation measure. The legislation would require the agency to develop and publish a permanent CPI-E, raising questions about methodology, implementation and administrative costs.
• Because the bills would use the higher of two indexes, beneficiaries would receive an increase above the current-law formula in some years and the same adjustment in others.
• The legislation would not address Social Security’s broader long-term financing challenges. Any additional benefit costs would need to be considered alongside the program’s existing financial outlook.

What to watch

The next legislative developments to watch are action in the House Ways and Means Committee and the Senate Finance Committee. Any future BLS announcement concerning development of an official CPI-E would also be relevant. Unless Congress enacts the legislation, the current CPI-W-based formula remains in effect.

The COLA Watch page tracks the 2027 adjustment, and the 2027 COLA Calculator shows the effect on a specific annuity. The 2027 Medicare Part B premium, which affects how much of the Social Security raise reaches a beneficiary’s bank account, will be added to the Medicare premiums page once the Centers for Medicare & Medicaid Services (CMS) announces it. The research behind the CPI-E proposal is discussed in Federal Retiree COLAs Could Be Higher Under Different Inflation Index, Report Says, and other Social Security proposals are summarized in Two Social Security Bills Are Back in Congress.

Sources

• H.R. 5841, Boosting Benefits and COLAs for Seniors Act (bill text, govinfo.gov)
• S. 3059, Boosting Benefits and COLAs for Seniors Act (Congress.gov)
• Congressional Research Service: A Hypothetical Social Security Cost-of-Living Adjustment Based on the R-CPI-E (IF12675)
• Congressional Research Service: Cost-of-Living Adjustments for Federal Civil Service Annuities (94-834)
• Bureau of Labor Statistics: Consumer Price Index for Americans 62 Years of Age and Older (R-CPI-E)
• Social Security Administration: Cost-of-Living Adjustment (COLA) Information for 2027