Your 2026 COLA, after the Medicare bite
The 2026 cost-of-living adjustment is in: 2.8% for CSRS and Social Security, 2.0% for FERS under the diet-COLA rules. But the number on the announcement isn’t the number that hits your account. A $17.90 jump in the Medicare Part B premium quietly claws back part of the raise — and for the average retiree, the net increase is a good deal smaller than the headline. Here’s what actually lands in your check, and when.
1. The raise is real — and smaller than it looks
Every autumn the COLA announcement makes headlines, and every January retirees discover the increase in their account is a little less than advertised. That’s not an error — it’s the Medicare Part B premium, which for most retirees is deducted directly from the same check the COLA just raised. The raise and the premium hike arrive together, and they partly cancel.
For 2026 the gross numbers are 2.8% for CSRS and Social Security and 2.0% for FERS. Whether that translates into a satisfying bump or a barely-noticeable one depends on the size of your benefit and how much of the Part B increase comes out of it. Let’s separate the headline from the take-home.
2. What each group actually gets in 2026
Three different rulebooks govern three different raises:
| Who | 2026 COLA | Why |
|---|---|---|
| CSRS annuitants | 2.8% | Full CPI-based adjustment, uncapped |
| Social Security | 2.8% | Full CPI-W adjustment, uncapped |
| FERS annuitants | 2.0% | Diet COLA: capped at 2% when inflation is 2–3% |
The FERS shortfall isn’t a glitch — it’s the law. When inflation runs between 2% and 3%, FERS COLAs are capped at 2%; above 3%, FERS gets inflation minus a full percentage point. Since 2026 inflation came in at 2.8%, FERS retirees land at 2.0% while everyone else gets the full 2.8%. We unpack why that compounds into serious money over a long retirement in the FERS diet COLA, explained.
3. The Medicare bite: Part B eats part of it
Here’s the part the announcement leaves out. The standard Medicare Part B premium rises to $202.90 a month in 2026, up about $17.90 from $185 in 2025. For the large majority of retirees, Part B is withheld straight from their Social Security or annuity payment — so that $17.90 increase is subtracted from the very raise the COLA just delivered.
The math is unforgiving for smaller benefits. Take the average Social Security check: a 2.8% COLA adds roughly $58 a month gross, but after the $17.90 Part B increase the net raise is closer to $40. For a modest FERS annuity getting only 2.0%, the Part B increase can swallow an even larger share. And higher earners who pay IRMAA surcharges on top of the base premium keep less still.
4. See your net 2026 raise
Enter your current monthly benefit, pick your system, and tell the calculator whether Medicare Part B comes out of this check. It shows your gross COLA raise, the Part B bite, and what actually lands.
Your 2026 raise
Uses the 2026 COLA (2.8% / 2.0%) and the $17.90 standard Part B increase. It doesn’t model IRMAA surcharges (which reduce your net further) or Social Security’s hold-harmless rule. Illustration only, not advice.
5. When it hits your check
The timing catches first-year retirees off guard. The COLA is effective December 1, 2025. For federal annuitants it first appears in the annuity payment dated January 1, 2026 (landing in early January); for Social Security, the increase begins with the benefit paid in January 2026. The new $202.90 Part B premium is applied at the same moment, which is exactly why the net change you actually see is the COLA increase minus the Part B increase — not the headline percentage on its own.
The strategic takeaway is simple: CSRS and Social Security keep pace with inflation reasonably well, but a FERS annuity quietly falls behind a little every year inflation tops 2%. That’s an argument for holding some growth and inflation-resistant assets alongside your pension — see protecting your savings from inflation — so the gap the diet COLA leaves doesn’t widen unchecked.
Frequently asked questions
What is the 2026 COLA for federal retirees and Social Security?
For 2026, the cost-of-living adjustment is 2.8% for CSRS annuitants and for Social Security beneficiaries. FERS annuitants receive a reduced “diet COLA” of 2.0%, because FERS COLAs are capped at 2% whenever inflation runs between 2% and 3%. The adjustment is based on the rise in the CPI-W through the third quarter of 2025. It takes effect December 1, 2025 and first appears in the January 2026 annuity payment; Social Security’s increase begins with benefits paid in January 2026.
Why do FERS retirees get a smaller COLA than CSRS?
FERS uses a “diet COLA” formula. When inflation is 2% or less, FERS gets the full amount. When inflation is between 2% and 3%, the FERS COLA is capped at 2%. When inflation tops 3%, FERS gets the inflation rate minus one percentage point. CSRS and Social Security always receive the full CPI-based increase. Because 2026 inflation landed at 2.8% — inside the 2-to-3% band — FERS retirees get 2.0% while CSRS and Social Security get 2.8%. In a single year the gap looks tiny, but over a long retirement it compounds into real lost purchasing power.
How much does the 2026 Medicare Part B increase reduce my COLA?
The standard Medicare Part B premium rises to $202.90 a month in 2026, up about $17.90 from $185 in 2025. If your Part B premium is deducted from your Social Security or annuity payment, that increase comes straight out of your raise. For the average Social Security recipient, a 2.8% COLA adds roughly $58 a month gross, but after the $17.90 Part B increase the net raise is closer to $40. Higher earners who pay IRMAA surcharges keep even less of their COLA.
When does the 2026 COLA show up in my check?
The COLA is effective December 1, 2025. For federal annuitants, it first appears in the annuity payment dated January 1, 2026 (received in early January). For Social Security beneficiaries, the increase begins with the benefit paid in January 2026. If your Medicare Part B premium is deducted from your payment, the new $202.90 premium is applied at the same time, so the net change you see is the COLA increase minus the Part B increase.
Does the COLA make my pension keep up with inflation?
Partly. CSRS and Social Security track inflation closely because they get the full CPI-based adjustment. FERS does not fully keep up, because the diet-COLA formula shaves the increase whenever inflation exceeds 2%. Over a 25- or 30-year retirement, those small annual shortfalls compound, so FERS retirees should plan for some erosion of purchasing power and lean on inflation-resistant savings to fill the gap. Our guide on protecting savings from inflation covers how to do that.