The 2027 cost-of-living adjustment is official, and FERS retirees 62 and older are getting a 2.6% raise. But the average FEHB premium is going up 10.9% for 2027. For many retirees, the health premium increase will take back a big chunk of that raise, and some will see a smaller check in January.
Here’s what changed, how the math works, and what you can do about it.
The 2027 COLA
| Who | 2027 COLA |
|---|---|
| CSRS retirees | 3.6% |
| Social Security | 3.6% |
| FERS retirees 62 and older | 2.6% |
| Regular FERS retirees under 62 | None |
Why do FERS retirees get less? FERS uses what’s often called the “diet COLA.” When inflation is over 3%, FERS retirees get inflation minus 1%. With inflation at 3.6%, that’s 2.6%.
And regular FERS retirees under 62 don’t get a COLA on their pension at all. COLAs start at 62.
The FEHB premium increase
According to OPM, the average FEHB enrollee premium is going up 10.9% for 2027. For postal employees and retirees in PSHB, the average increase is 8.2%.
Keep in mind that’s an average. Your plan’s increase could be much higher or much lower, so look up your own plan’s 2027 premium before you do the math.
The math: how much of your raise do you keep?
Here’s an illustrative example, not a real client:
| Monthly amount | 2027 change | |
|---|---|---|
| FERS pension | $2,000 | +$52.00 (2.6% COLA) |
| FEHB premium (your share) | $300 | +$32.70 (10.9% increase) |
| Net change | About +$19 |
In this example, the premium increase takes back more than 60% of the COLA. Your numbers will be different, depending on your pension and your plan’s actual premium change.
Under 62 on FERS? Your check may go down
If you’re a regular FERS retiree under 62, there’s no COLA on your pension to offset the premium increase. Using the same example, a $300 monthly premium going up 10.9% means about $32.70 less in your check each month starting in January.
That’s why it matters so much to check your plan’s 2027 premium this year.
What you can do
- Look up your plan’s 2027 premium. Find your enrollment code on your annuity statement or paystub, then check OPM’s 2027 premium tables.
- Run your own numbers. Multiply your pension by your COLA, and compare it to your plan’s premium change.
- Compare plans during Open Season, Nov 9 – Dec 14, 2026. Look at the total yearly cost (premium plus deductibles and out-of-pocket maximum), not just the premium, and make sure your doctors are in-network.
Open Season is your one chance each year to switch plans without a qualifying life event, so don’t let it pass you by.
The bottom line
The 2027 COLA is a raise, but for many federal retirees, FEHB premiums will take back a big part of it, and FERS retirees under 62 may see their check go down. Check your plan’s numbers and use Open Season to make sure you’re in the right plan for 2027.
Are you a federal employee within 12 months of retirement, or already retired, with $1 million+ invested? Book a free 15-minute Fit Call. You can also download our free Federal Retirement Roadmap.
Educational only, not tax, investment, or legal advice. Please consult your own tax, legal and financial advisors for personalized advice. Haws Federal Advisors | HawsFederalAdvisors.com