Two of the Three Months That Decide the 2027 COLA Are Now Published

The Bureau of Labor Statistics published the August Consumer Price Index on September 11, 2026. It matters more than an ordinary inflation report, because August is the second of the three months that set next year's cost of living adjustment for military retired pay, Survivor Benefit Plan annuities and VA compensation. What is settled: the July and August CPI-W figures are published, and the base they are measured against has been fixed since last year. What is not: the September index, released October 14, 2026, the only number that can still move the answer. With two of three months on the books, the 2027 COLA falls between 3.4% and 3.6% across the entire range of what September has done in the last ten years. The 2026 COLA was 2.8%.

How the COLA is actually set

Military retired pay is adjusted by statute, not by anyone's discretion. Under 10 U.S.C. § 1401a(b)(1) and (b)(2) the increase takes effect December 1 each year and equals the percentage by which the price index for the base quarter exceeds the base index, rounded to the nearest one tenth of one percent. Section 1401a(g)(2) defines the base quarter as the calendar quarter ending September 30, which is why July, August and September are the only three months that count. The index used is the CPI-W, the Consumer Price Index for Urban Wage Earners and Clerical Workers, BLS series CWUR0000SA0.

Two other payments ride on the same number. SBP annuities increase at the same time and by the same percentage under 10 U.S.C. § 1451(g)(1), and VA pension and Dependency and Indemnity Compensation are tied to the Social Security increase under 38 U.S.C. § 5312, which uses the same third-quarter comparison. VA disability compensation is the exception, covered further down.

The method is easy to check, because it reproduces the COLA being paid right now. The Q3 2025 CPI-W average was 317.265 against a Q3 2024 average of 308.729, a rise of 2.76%, which rounds to the 2.8% COLA effective December 1, 2025. Same formula, one year forward:

What September can still move

July and August already contribute two thirds of the average. The table below runs the statutory formula with different values for September, expressed as the change from August, and rounds the result the way the statute requires.

The band matters. Over the last ten Septembers the August to September change in the CPI-W has run from +0.06% in 2019 to +0.62% in 2017, averaging +0.22%. Every value in that range yields 3.4%, 3.5% or 3.6%. The last row shows what it would take to reach 3.9%: a single-month jump of 1.48%, the second largest monthly rise in the CPI-W in a decade, behind only June 2022 at +1.57%. Not impossible, but not the base case.

What it is worth, by retired grade

A percentage is not a plan, so here is the money. The rows below use the site's High-3 method, the same one behind the High-3 calculator: the 2026 basic pay table at the retiring grade, averaged across the final three years of service, times 2.5% per year served. Read it for scale, not as your own figure. A real high-3 averages your actual last 36 months, which for a 2026 retirement includes the 2024 and 2025 pay tables and comes out lower.

Notice how little separates the 3.4% and 3.5% columns: about $2.00 a month for an E-5 and $6.00 for an E-9. The spread between plausible outcomes is small. The gap between this year and next is not, since 3.5% is worth roughly a quarter more than the 2.8% paid for 2026. If you are still serving, the BRS calculator applies COLA growth to the pension side of that comparison.

The VA side needs a bill, and the bill has not moved

This is the part that gets reported as automatic and is not. VA pension and DIC follow the Social Security increase by permanent statute under 38 U.S.C. § 5312. VA disability compensation rates under 38 U.S.C. § 1114 do not: the automatic adjustment in 38 U.S.C. § 1104(a) covered fiscal years 1998 through 2013, and since then Congress has passed a separate Veterans' Compensation Cost-of-Living Adjustment Act nearly every year to carry the increase across.

For 2027 that bill exists in both chambers and neither version has passed. S. 4487 was introduced May 11, 2026, read twice and referred to the Senate Committee on Veterans' Affairs, with no action since. Its identical House companion, H.R. 8552, was forwarded by subcommittee to the full committee by voice vote on June 30, 2026. Last year's version, S. 2392, became Public Law 119-42 on November 25, 2025, six days before the December 1 effective date it authorized.

Applying 3.4% and 3.5% to the rates now in effect for a veteran with no dependents (VA rates effective December 1, 2025): 100% goes from $3,938.58 to $4,072.49 or $4,076.43; 70% from $1,808.45 to $1,869.94 or $1,871.75; 50% from $1,132.90 to $1,171.42 or $1,172.55; 30% from $552.47 to $571.25 or $571.81. Dependents widen the gap, which the VA disability calculator computes at current rates.

When the larger payment actually lands

The effective date is December 1, 2026, which means the December 2026 entitlement is the first one paid at the new rate. DFAS publishes the dates, and the two audiences do not get paid on the same day:

• Retirees: the December 2026 entitlement is scheduled for December 31, 2026. Retired pay is due the first of the month, and when the first is a weekend or holiday it moves to the last business day of the prior month. January 1, 2027 is a holiday.
• SBP annuitants: the same entitlement is scheduled for January 4, 2027, because annuitants move forward to the first business day instead.
• VA disability compensation: once authorized, the increase is effective December 1, 2026 and appears in the payment covering that month. Check your own annuity figure in the SBP calculator rather than from a projection.

One group gets a full point less

Members who entered service after July 31, 1986 and elected the CSB/REDUX career status bonus have their COLA reduced by one full percentage point under 10 U.S.C. § 1401a(b)(3). A 3.4% COLA pays them 2.4%. On the E-7 row above that is $74.40 a month instead of $105.40, and the gap compounds for the rest of the retirement. High-3 and Blended Retirement System retirees receive the full COLA at every age.

The bottom line

Two of the three months that decide the 2027 COLA are published: July CPI-W at 327.104 and August at 328.481, against a Q3 2025 base of 317.265. September is the only open input, and across the full ten-year range of August to September moves the answer lands at 3.4% to 3.6%, most likely 3.5%. That is $34.00 to $36.00 a month per $1,000.00 of gross retired pay, from roughly $75.00 for a 20-year E-5 to about $197.00 for a 26-year E-9, effective December 1 and paid to retirees on December 31, 2026. Retired pay and SBP adjust automatically by statute. VA disability compensation still needs a bill that has not moved since June. Rates cited are the FY2026 and calendar-2026 figures currently in effect; always verify with your finance office or the VA before making financial decisions.