Military retired pay will rise 3.6% for 2027. The Social Security Administration announced the 2027 cost-of-living adjustment, or COLA, on October 14, 2026, and military retired pay follows it by law.
When it arrives
The increase takes effect December 1, 2026. Retired pay is paid on the first business day of the month for the month before, so the first payment at the new rate arrives at the start of January 2027.
What it is worth
A 3.6% increase adds $36 a month for every $1,000 of retired pay:
| Current monthly retired pay | Increase | New amount |
|---|---|---|
| $1,500 | $54 | $1,554 |
| $2,500 | $90 | $2,590 |
| $3,500 | $126 | $3,626 |
| $5,000 | $180 | $5,180 |
Over a year, a retiree receiving $2,500 a month gets about $1,080 more.
Who gets the same increase
- Retirees under the High-3 system and the Blended Retirement System receive the full 3.6%.
- Survivor Benefit Plan annuities rise by 3.6%.
- VA disability compensation is also expected to rise by 3.6% on December 1, once Congress passes its yearly COLA bill.
- Combat-Related Special Compensation rises with VA rates.
Who gets less
Members who chose the Career Status Bonus under the REDUX system receive the COLA minus one percentage point, so 2.6% for 2027. Their retired pay is recalculated once, at age 62, to make up for the smaller increases, and then the smaller COLA resumes.
Your SBP premium
If you pay Survivor Benefit Plan premiums, they rise by the same percentage as your retired pay. So part of your increase goes back into the higher premium.
How the COLA is set
The COLA comes from the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers, the CPI-W, from the third quarter of one year to the third quarter of the next. Prices rose 3.6% by that measure. The increase for 2026 was 2.8%.
Common questions
Is the increase taxable? Retired pay is taxable as income, so the increase is too. VA disability compensation is not taxed.
Does my state tax my retired pay? It depends on your state. A growing number of states fully exempt military retired pay.
Do I need to do anything? No. DFAS applies the increase automatically. Your January retiree account statement will show the new amount.