Despite higher prices at the gas pump and the largest month-over-month increase in a key inflation tracker this fiscal year, predictions for the year-end cost-of-living adjustment (COLA) in military retirement pay, VA disability benefits, and Social Security payments have not budged.

The 2.8% prediction made this month by one statistical model is the same as the model’s February figure. The typical Social Security recipient would receive a little less than $60 more per month should the prediction prove accurate.

[RELATED: MOAA’s COLA Watch]

Calculating COLA

The annual adjustment stems from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is released monthly and measures the cost of a “market basket” of goods in various regions. The average of the CPI-W monthly figures over the last three months of the fiscal year (July, August, and September) is compared with the previous year’s three-month average to calculate the increase.

CPI-W figures from earlier in the fiscal year don’t factor into the calculations, but they can set some benchmarks. At the halfway point of the fiscal year, those benchmarks are a bit of a mixed bag.

The February 2026 index, released in March, rests at 0.7% above the yearly baseline. The February 2025 CPI-W was 1.2% above that year’s baseline, which could point to a lower trend line in 2026.

However, the recent February figure was half a percentage point higher than the January number – the largest month-over-month increase of the year and a slightly faster increase than 2025 figures, which jumped 0.4 percentage points from January to February.

[RELATED: More Financial Resources From MOAA]

Inflation Factors, and MOAA’s Role

Unclear trend lines, complicated by what Federal Reserve Chair Jerome Powell called an “energy shock of some size and duration,” create a muddier-than-usual forecast. Even the historical connection between gasoline prices and inflation has been questioned by researchers.

What to keep in mind amid the uncertainty:

• Behind the Curve: Even if CPI-W captures inflation pressures perfectly (a view not shared by everyone), it’s not a real-time measurement: Figures are released a month after data is gathered, and the index won’t immediately reflect any supply-chain issues (or fixes).
  
  
• Fed Flex: Should prices spike, the Federal Reserve may adjust policy to move inflation toward its 2% long-term goal. Whether these changes would move the needle – or whether such movements would come in time to change COLA calculations – is far from certain.
  
  
• MOAA’s Mission: When COLA rates rise, the larger increases can become targets for lawmakers seeking ways to reduce spending, lower the debt, or free up funds for other priorities. MOAA’s has fought such efforts for decades – the adjustment maintains the value of service-earned retirement and disability benefits, and reducing it in any fashion weakens the nation’s commitment to those who serve and have served.

The next CPI-W release is set for April 10. Keep up with all the releases, and other COLA news, at MOAA’s COLA Watch page.