Estimates for next year’s cost-of-living adjustment (COLA) in uniformed services retirement pay, Social Security checks, VA disability compensation, and other programs put the increase at the highest level since COVID-influenced spikes in the early 2020s.

The latest projections place the upcoming COLA at 3.5% or 3.6%, more than the 2.8% increase made to this year’s checks and the highest since the 8.7% hike announced nearly four years ago. The final figure influencing the rate – the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for September 2026 – will be announced Oct. 14 by the Bureau of Labor Statistics.

[CHECK THE CHART: MOAA’s COLA Watch]

CPI-W figures have trended above last year’s levels since March, pointing to an increase in the annual adjustment. Aside from the post-COVID-lockdown increases of 8.7% and 5.9%, the projected COLA would be the highest since a 3.6% increase for 2012.

While a larger increase means larger checks for beneficiaries, it reflects inflationary pressures – in other words, higher prices – that COLA may not completely cover.

It could also put the adjustment back into an unwelcome conversation as the 120th Congress takes shape.

COLA and the Budget

Every two years, members of the incoming legislative session are greeted by a report from the Congressional Budget Office (CBO) outlining proposals to reduce the deficit. Recent reports have contained similar COLA-related language – a plan to replace the COLA calculation with a new system that would save taxpayers money.

The 2024 version of the CBO proposal projected a $278 billion savings over 10 years thanks to this change, with $50 billion of those savings coming from non-Social Security benefit programs, such as uniformed services retirement pay.

Such a proposal unfairly shifts the budget burden onto retirees and disabled veterans who would see the purchasing power of their compensation reduced to create these projected savings. And the higher the projected adjustment, the higher the projected savings, making such a change more attractive to lawmakers facing not just ongoing red ink, but a looming Social Security funding crisis.

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Protecting the value of service-earned benefits remains the cornerstone of MOAA’s advocacy work. While these CBO proposals have not found a home in proposed legislation in recent years, we will continue to stand against such measures and other moves unfairly targeting members of the uniformed services community, such as recent CBO proposals to weaken the TRICARE For Life benefit.

Keep up with MOAA’s ongoing advocacy efforts at our Legislative Action Center, and visit MOAA.org/colawatch on Oct. 14 after 8:30 a.m. Eastern for the adjustment announcement.