Social Security News: Upcoming 2026 COLA, Federal Retiree Strategy, and Fairness Act Payment Update

As federal employees approach retirement, staying informed about Social Security changes is important. With the 2026 cost-of-living adjustment (COLA) announcement just weeks away, now is the time to understand how these updates may affect your retirement income and strategy.

Overview of Social Security for Federal Employees

Federal employees often have unique considerations when it comes to social security. Unlike many in the private sector, federal retirees likely receive a FERS (Federal Employees Retirement System) or CSRS (Civil Service Retirement System) pension, in addition to social security and the Thrift Savings Plan (TSP). Understanding how these retirement income sources interact is key. The Social Security Administration (SSA) manages retirement benefits, disability benefits, and Supplemental Security Income (SSI) for those who qualify.  

Importance of COLA for Retirees from the Government and Military

The cost-of-living adjustment (COLA) is vital for retirees as it helps maintain the purchasing power of social security benefits in the face of inflation. Each year, the SSA announces the COLA for the upcoming year, affecting millions of social security beneficiaries. For retirees, particularly those on a fixed income, the COLA can make a significant difference in their ability to cover essential expenses, although it is often offset by increases in Medicare B premiums. 

Learn more about COLAs at a free federal retirement workshop.

Upcoming Release of 2026 COLA for Social Security, FERS, and CSRS

The cost-of-living adjustment, known as COLA, is an annual adjustment to social security benefits, CSRS and FERS annuity payments designed to counteract the effects of inflation. For social security beneficiaries, the COLA ensures that their monthly benefit maintains its purchasing power. The Social Security Administration (SSA) calculates the COLA based on the Consumer Price Index, and is identical to the adjustment for CSRS. Here is the breakdown for FERS employees: 

Estimate your pension income with our FERS Benefit Calculator.

Latest COLA Estimate for Next Year’s Adjustments

Recent projections from the Senior Citizens League suggest a 2.7% increase in benefits, which would be slightly above the 2.5% adjustment retirees received in 2025, but down from the 3.2% increase seen in 2024. While this increase may offer modest relief, many retirees won’t feel the full impact due to rising Medicare Part B premiums, which are expected to climb by over 11%. This would mean a 2.0% bump in FERS annuity payments. For active U.S. federal workers, there might be small one percent federal employee pay raise effective January 1.

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When the Annual COLA Will Be Announced

The Social Security Administration (SSA) will officially announce the 2026 COLA on October 15, 2025, following the release of third-quarter inflation data from the Bureau of Labor Statistics. The figure is determined by looking at the uptick in the CPI-W index between July and September of last year compared with the same three months in the current calendar year. 

Social Security Withdrawal Strategy for Federal Employees

Federal retirement planning involves more than just Social Security. Most federal employees under FERS contribute to Social Security throughout their careers, but they also receive a defined benefit pension and participate in the Thrift Savings Plan (TSP). This three-tiered system means that many who retire from a federal career are more financially secure than many others covered by the SSA’s retirement benefits, and therefore require a different strategy than what most common advice offers from standard sources. For those retiring early from the government, there’s also the FERS Special Retirement Supplement (SRS) to consider as it is unique to the federal space. You can estimate your income from these benefit payments with our FERS Supplement Calculator. 

Common Social Security Information about When to Withdraw

General social security retirement advice often encourages individuals to delay withdrawing social security benefits as long as possible, ideally until age 70. The rationale is that delaying increases your paper or electronic payments due to delayed retirement credits. This strategy works well for those without other substantial retirement income sources. However, federal employees often have a civil service pension that changes this calculation, requiring a more tailored approach to maximize their overall financial security during retirement. Choosing between age 62 vs. FRA (full retirement age) vs. 70 is not nearly as cut-and-dry for feds as it is for over a million Americans retiring from the private sector. 

Advantages of Withdrawing Benefits at Different Ages

Deciding when to withdraw social security benefits involves weighing various factors. Claiming at age 62 results in a reduced monthly dollar amount, but provides income sooner. For federal annuitants, though, these earlier payments could allow investments in either the TSP or an IRA to grow longer before being withdrawn, providing a monetary cushion for you further down the road. Waiting until full retirement age, which is 67 for those born after 1960, provides the full social security benefit amount. Delaying until age 70 increases benefits even further, and for many older adults, this is the way to go if a viable option. The optimal choice depends on individual financial circumstances, health considerations, and other retirement income sources. As far as retirement benefits go, retirees with a federal pension need to carefully assess these factors.

Strategic coordination between these income sources is key. Unlike the general public, federal workers must consider how their pension interacts with SSA benefits eligibility, taxation, and long-term income sustainability.

Schedule a free consultation with a fed-expert advisor. 

Social Security Fairness Act: Overview of the Act and Its Passage

The Social Security Fairness Act reformed certain aspects of  benefit payments for CSRS annuitants and their survivors. Passed earlier this year, the Social Security act addresses long-standing concerns regarding the treatment of individuals who have paid social security taxes but face reduced benefits due to specific provisions, the WEP and GPO. Retiring these rules through this legislation was one of the last acts passed before President Donald Trump took office for his second stint in the White House. It retroactively took effect in January 2024. 

Impact on WEP and GPO for CSRS Retirees

The repeal of the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). The WEP and GPO primarily affect CSRS retirees, reducing their social security benefit payments if they also receive a pension from government employment. By repealing these provisions, the act provided a more equitable social security update, allowing CSRS retirees and their survivors to receive a higher benefit each month, whether they receive a paper check or a direct deposit that puts in benefit payments electronically. 

Quick Facts:

• The WEP impacted the CSRS annuity itself, lowering the monthly benefit payments.
• The GPO, on the other hand, impacted CSRS survivor benefits from SSA, reducing or eliminating payments a spouse or widow(er) might otherwise receive.
• CSRS-offset retirees were not impacted by the law’s passage. Their retirement benefit from CSRS will still be offset by contributions to SSA. 
• This has no impact on eligibility for disability benefits, SSDI (Social Security Disability Insurance)

Timeline for Updates on Social Security Payments

• SSA began issuing adjusted payments in February 2025, with retroactive lump sums covering missed benefits from January 2024.
• Over 3.1 million payments totaling $17 billion have already been distributed to millions of Americans. 

Bonus: Have concerns over the data security regarding your Social Security number? Reach out to one of SSA’s field offices or the national call center. If someone contacts you through text claiming to be the SSA, it is probably a scam!