Military Retirees, Disabled Veterans Get 3.6% 2027 COLA Raise

Q: Which military retirees will mysteriously miss out on the full 2027 benefit boost, and what past decision caused this permanent penalty?

The retirees who will not get the full 3.6% 2027 increase are those who entered service on or after Aug. 1, 1986 and elected the Career Status Bonus/REDUX retirement plan. Their COLA is cut by one percentage point, so they will get about 2.6% instead of 3.6%—roughly $26 more per month for every $1,000 of retired pay, rather than $36. The permanent penalty stems from a choice they made at the 15-year mark: accepting the $30,000 Career Status Bonus in exchange for REDUX terms. Under that deal, annual retired-pay COLAs are generally set at CPI minus 1 percentage point whenever the regular COLA exceeds 1%. That reduction is not a one-year quirk. It continues throughout retirement and compounds over time, leaving REDUX retirees with lower monthly checks than comparable retirees under High-3 or other standard systems. The plan cannot be reversed. There is one partial exception: at age 62, DFAS recalculates REDUX retired pay to what it would have been under High-3, creating a one-time catch-up. But after that reset, the reduced CPI-minus-1 COLA resumes for future years. VA disability compensation is separate and still receives the full COLA.

3 articles · Updated · Military.com · Oct 14

Military retirees, disabled veterans and survivors will see monthly benefits rise 3.6% in 2027, with the increase applied to VA disability pay, military pensions and survivor payments.
The adjustment is tied to inflation under the annual COLA formula, which uses the July-through-September CPI-W average; benefits do not fall when that index is flat or lower.
VA disability checks will increase by about $6.50 a month for a 10% rating and about $147.08 for a 100% rating without dependents, while DIC survivor payments rise about $61.18.
Military retirees will get about $36 more per $1,000 of monthly pension, but CSB/Redux retirees receive a reduced increase of about $26 per $1,000 and 2026 retirees get prorated COLA.
The 2027 increase tops 2026's 2.8% and 2025's 2.5%, though it remains well below the 8.7% jump paid in 2023; Social Security and civil service beneficiaries also get 3.6%.