The Cost-of-Living Adjustment (COLA) is a critical measure designed to ensure that the monthly benefits of millions of Americans, including veterans and retired military members, keep pace with inflation. This increase, while modest compared to some recent years, represents a necessary step to help offset the persistent rise in daily expenses such as housing, healthcare, and food.
Who Benefits from the 2026 COLA?
The 2.8% COLA for 2026 will apply to several key federal benefit programs that support those who served in the U.S. Armed Forces:
- Military Retirees: All military retirees, regardless of their retirement plan (High-3, Final Pay), will see a 2.8% increase to their retired pay.
- Note: Retirees who opted for the Career Status Bonus (CSB/Redux) retirement plan will have their COLA reduced by one percentage point if the overall COLA is between 2% and 3%, meaning they will receive a slightly lower increase.
- Disabled Veterans: Veterans receiving VA disability compensation will see their monthly payments increase by 2.8%. This adjustment applies to all disability rating levels (10% to 100%).
- Survivors: Benefits for survivors, such as Dependency and Indemnity Compensation (DIC) payments for surviving spouses, will also rise by the same 2.8%.
When Do the Increases Take Effect?
The new, adjusted rates will be implemented on a slightly different schedule depending on the type of benefit:
| Benefit Program | COLA Percentage | Effective Date | First Payment Date |
| VA Disability Compensation & DIC | 2.8% | December 1, 2025 | December 31, 2025 |
| Military Retired Pay | 2.8% | January 1, 2026 | January 31, 2026 |
Veterans and retirees do not need to take any action; the increase is automatically applied to all eligible benefits.
The Impact on Monthly Payments
For those on a fixed income, even a small percentage increase translates to a crucial boost in purchasing power. For example:
- A military retiree currently receiving $2,500 per month in retired pay will see an increase of approximately $70 per month.
- A veteran receiving $1,500 per month in VA disability benefits will see an increase of about $42 per month.
- A veteran with a 100% disability rating (receiving roughly $3,938 per month as a single veteran in 2025) will see a monthly increase of over $107 in 2026.
This adjustment is intended to ensure that the value of earned benefits is maintained against the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), the official measure used to calculate the COLA.
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