How High Could Your COLA Go in 2027? – MOAA

How High Could Your COLA Go in 2027?  MOAA

A new projection puts the final figure at one of the highest levels in decades. Inflation-driven projections for the annual cost-of-living adjustment (COLA) for uniformed services retirement pay, along with Social Security and VA disability benefits, point to one of the largest increases in decades. Estimates vary, but one analyst’s recent 4.7% COLA prediction would mean the fourth-largest increase since the early 1990s, trailing COVID-inflated figures from the early 2020s and the 5.8% increase in 2009. It’s well above the 3.1% average increase over the last decade, according to CNBC, which highlighted the year-over-year hikes in fuel oil and gasoline as key drivers of the current figures. The projection came after the June release of May inflation data, including the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is used to set the COLA.

Tracking this index gives an idea of where the final rate may end up, and the trends will soon translate into the actual adjustment. Only the final three CPI-W data points of the fiscal year – July, August, and September figures – are used in the COLA calculation. The average CPI-W from those months is compared with the average from the same months last year to determine the increase. Get the full details on the math at MOAA’s COLA Watch page. While