Military retirees will see the 2027 cost-of-living raise for the first time in the retired-pay deposit that lands on December 31, 2026, a day earlier than the calendar suggests, according to Veteran Life. The increase is 3.6 percent, the same figure Social Security announced on October 14. A retiree who receives $2,500 in retired pay should see about $90 more each month. Military Times calls it the biggest increase in four years.
The raise follows a 2.8 percent adjustment in 2026 and 2.5 percent in 2025. Because the retired-pay formula follows the same inflation reading that sets Social Security’s raise, the military number was effectively fixed once the government published its September consumer price data. The open question for most retirees is not the size of the raise but the date it shows up.
Why the first raise lands on December 31
The increase takes effect December 1, 2026. Mickey Addison, a retired Air Force colonel who wrote the Veteran Life explainer, says retirees receive it in their December 31 paycheck. The timing follows a payment rule rather than a special schedule. The DFAS pay schedule says retirees are paid on the last business day when the first of the month falls on a weekend or holiday, and January 1, 2027 is a Friday and a federal holiday.
Retirees who want to know what the deposit will contain can work it out from the gross figure on their latest statement. The Military Times report by Karen Jowers uses a retiree with $2,500 in retired pay, who gains about $90 a month at 3.6 percent. A retiree at $3,200 would gain about $115, and one at $4,000 about $144. The exact amount appears in the December Retiree Account Statement or in myPay once the Defense Finance and Accounting Service processes it.
The raise first appears in the December 31, 2026 retired-pay deposit, and the December Retiree Account Statement is where DFAS shows the new amount.
Get the next update the morning it lands →
Survivor Benefit Plan annuities follow a different date. Veteran Life reports that survivor payments rise by the approved percentage effective January 1, 2027. Combat-Related Special Compensation and Concurrent Retirement and Disability Pay also go up, because both are computed from retired pay and VA pay that have already been adjusted.
REDUX and Career Status Bonus retirees get 2.6 percent
Not every military retiree gets the full 3.6 percent. Veteran Life says retirees under the Career Status Bonus and REDUX retirement system receive the cost-of-living adjustment minus one percentage point, which makes their 2027 raise 2.6 percent. Retirees under the High-3 formula receive the full 3.6 percent. The one-point gap stays in place for the life of the retired pay.
The difference compounds in dollars. A retiree with $2,500 in retired pay gains about $90 a month under High-3 and about $65 under REDUX, a gap of $25 a month or $300 over the year. Retirees unsure which system covers them can ask DFAS, which holds the plan on file.
Retirees who left service during 2026 get a partial raise. The adjustment is prorated by the quarter in which retired pay began, and Veteran Life links to the DFAS guidelines for partial adjustments. Someone whose retired pay started in the first quarter of the year gets close to the full amount, while someone who retired late in the year may see only a fraction of 3.6 percent, with the full adjustment starting a year later.
Same percentage as Social Security, different calendar
Social Security says its 3.6 percent increase reaches nearly 72 million beneficiaries in January 2027, and about 7.3 million people on Supplemental Security Income see theirs on December 31, 2026. The agency’s COLA page says online notices open in late November for people who created a my Social Security account by November 18. Retirees who draw both a military pension and Social Security therefore get two raises on two dates.
The match between the programs is no accident. Military retired pay follows the same inflation reading, so when the Bureau of Labor Statistics posts the third-quarter average for the consumer price index for urban wage earners and clerical workers, both raises follow. Social Security announced the figure on October 14, which let Military Times report the military retiree numbers the same day.
The calendar difference matters for household budgets. A military retiree who also collects Social Security sees the larger retired-pay deposit first, on December 31, then the Social Security increase in the January payments. Anyone who budgets by month should expect the raise to arrive in two steps, with the first showing up before the new year begins.
Checking the December 31 deposit against the new rate
The free place to confirm any of it is the DFAS retired military pay site, which hosts myPay, the system DFAS calls the most convenient way to manage a retirement account. Retirees who still receive paper checks must set up direct deposit under a Treasury mandate, so direct deposit is how the December 31 payment reaches nearly every retiree.
The simplest test is multiplication. A High-3 retiree multiplies the gross pay on the November statement by 1.036, and a REDUX retiree by 1.026. A result that differs by more than a few dollars points to proration, a changed retirement plan on file or a deduction that moved. Survivors and partial-year retirees should use the DFAS tables, since their percentages differ.
DFAS has not posted a 2027 notice that confirms December 31 on its own pages, so the date rests on the holiday rule in its pay schedule and on Veteran Life’s account of the deposit. Military Times, for its part, reports only that the increase begins in January. Retirees who see a different amount or date on the December statement can raise it with DFAS before the next month’s payment.
More Financial Reading
- 24 Ways to Stretch a $2,087 Social Security Check
- 17 Places to Find Your Share of the $4.25 Billion States Give Back
- 18 Ways Out of 22% Credit Card Interest
This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
