After several years of volatile cost-of-living adjustments, millions of veterans and military retirees are getting some welcome news for 2026 a 2.8% increase in their monthly benefits beginning December 1, 2025.
This increase, tied directly to the Social Security Administration’s 2026 Cost-of-Living Adjustment (COLA), affects payments from the Department of Veterans Affairs (VA), military retirement pensions, and Dependency and Indemnity Compensation (DIC) for survivors.
Although the raise is higher than last year’s 2.5%, it remains well below the historic 8.7% spike seen in 2023, when inflation hit record highs. Still, for millions of households living on fixed incomes, even a modest boost can make a meaningful difference.
“Every dollar counts for veterans who rely on these payments,” said Chris Goldsmith, a veterans’ advocacy consultant. “But with rising costs of essentials, the real-world impact can vary widely.”
Overview of the 2026 Pay Raise
| Category | Details |
|---|---|
| Type of Adjustment | Cost-of-Living Adjustment (COLA) |
| Percentage Increase | 2.8% |
| Effective Date | December 1, 2025 |
| First Payment With Increase | December 31, 2025 (for January 2026 cycle) |
| Applies To | VA disability pay, military retirement, DIC, and Survivor Benefit Plan (SBP) |
| Authority | Veterans’ Compensation Cost-of-Living Adjustment Act |
| Tied To | Social Security COLA |
| Estimated Increase | About $28 per $1,000 in benefits |
| Average Social Security Gain | Around $57 per month |
| Goal | Offset inflation and maintain purchasing power for beneficiaries |
What the 2026 Raise Means for Veterans and Retirees?
For most military retirees, the 2.8% COLA translates to roughly $28 more per $1,000 in monthly pension. That means a retiree receiving $3,000 per month would see an increase of $84.
However, those under the Career Status Bonus (CSB/Redux) retirement plan available to service members who entered after August 1, 1986 receive a smaller COLA, around $18 per $1,000, due to built-in reductions.
VA Disability Payments
The VA adjusts disability compensation according to rating percentages. Here’s a breakdown of the estimated monthly increase for 2026:
| Disability Rating | 2025 Monthly Pay | 2026 Pay (Estimate) | Monthly Increase |
|---|---|---|---|
| 10% | $175.51 | $180.42 | +$4.91 |
| 30% | $537.42 | $552.47 | +$15.05 |
| 60% | $1,395.93 | $1,435.02 | +$39.09 |
| 80% | $2,044.89 | $2,102.15 | +$57.26 |
| 100% | $3,831.30 | $3,938.58 | +$107.28 |
Veterans with dependents spouses, children, or parents will receive more, depending on their household makeup.
“The 2.8% boost might look small on paper, but for a 100% disabled veteran, that’s an extra $1,200 a year, tax-free,” explained Dr. Robert Hensley, an economist who studies federal benefit programs. “That’s meaningful support during uncertain economic times.”
Impact on Survivors and Families
Survivor Benefit Plan (SBP) payments and Dependency and Indemnity Compensation (DIC) will also rise by 2.8%. For spouses receiving DIC benefits, the standard rate is expected to increase from $1,653.07 to $1,699.36 per month in 2026.
This increase helps families of veterans who passed away due to service-connected conditions keep pace with inflation.
“DIC increases aren’t just about numbers,” said Amy Douglas, spokesperson for the Disabled American Veterans (DAV). “They ensure surviving families continue receiving the financial respect and stability they deserve.”
Is the 2026 COLA Enough to Match Rising Costs?
While the 2.8% adjustment provides some relief, experts caution it might not fully cover the actual cost increases faced by aging veterans, especially in healthcare, housing, and long-term care.
According to Genworth’s 2024 Cost of Care Survey, the average annual cost of:
- A home health aide is nearly $78,000
- A private nursing home room exceeds $127,000
Those costs are rising much faster than the Consumer Price Index (CPI-W), which the government uses to calculate COLA.
“The CPI doesn’t fully capture what retirees and veterans actually spend money on,” said Karen Holcomb, a financial planner specializing in veteran clients. “Medical bills, prescriptions, and assisted living costs are skyrocketing, while COLA adjustments lag behind.”
This means that even with the increase, many households may still feel financial pressure, especially those depending solely on VA or military benefits.
Planning Beyond the 2026 Pay Bump
Financial advisors emphasize that while the COLA increase helps, it shouldn’t be seen as a long-term solution. Instead, veterans and retirees should integrate it into a broader financial plan. Those with 30% or higher VA disability ratings may qualify for additional compensation for dependents, while children ages 18–23 can qualify as long as they’re full-time students. Veterans supporting elderly or disabled parents can also claim them as dependents.
“We encourage veterans to regularly review their benefits, estate plans, and insurance coverage,” Holcomb added. “The key is preparation understanding how these systems work together prevents future financial hardship.”
Tips for Veterans and Retirees:
- Update your direct deposit and My VA or DFAS accounts to avoid delays.
- Review dependent eligibility each year.
- Track upcoming healthcare and insurance premium changes.
- Consult a Veterans Service Officer (VSO) for personalized guidance.
- Don’t assume Medicare or TRICARE covers all long-term care needs plan ahead.
How COLA Works?
The annual COLA is tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), calculated by the Bureau of Labor Statistics (BLS). It compares average prices from July, August, and September 2025 against the same months in 2024. The difference determines the percentage increase.
| COLA Year | COLA Percentage | Inflation Rate | Net Impact |
|---|---|---|---|
| 2023 | 8.7% | 8.0% | +0.7% |
| 2024 | 2.5% | 2.9% | -0.4% |
| 2025 | 2.5% | 2.7% | -0.2% |
| 2026 | 2.8% | 2.6% (est.) | +0.2% |
The 2.8% COLA for 2026 reflects modest inflation stabilization and ensures VA and military payments keep pace with cost-of-living increases.
Final Thought
The 2.8% pay raise for veterans and military retirees in 2026 provides modest but meaningful relief. For many, it represents more than just a financial adjustment it’s reassurance that their service continues to be recognized in tangible ways.
“COLA isn’t just about numbers,” said Goldsmith. “It’s about honoring commitments to those who’ve served and ensuring they can live with dignity.”
Still, experts agree that long-term financial planning, especially around healthcare and retirement, remains essential. While the COLA increase won’t fix every gap, it’s a positive step forward in protecting the stability of America’s veterans and their families.
FAQs
When does the new COLA take effect?
The 2.8% increase becomes effective December 1, 2025, and will be reflected in payments deposited around December 31, 2025.
Does this apply to both military retirees and VA disability recipients?
Yes. The increase affects both VA disability compensation and military retirement pensions, as well as DIC and SBP payments.
How much more will a 100% disabled veteran get?
A veteran rated at 100% with no dependents will receive an estimated $107.28 more per month, or $1,287 annually.
Will healthcare costs outpace the COLA increase?
Likely yes. Experts warn that healthcare inflation continues to rise faster than general consumer inflation.
Do I need to apply for the COLA increase?
No. The COLA adjustment is automatic for all eligible veterans and retirees no separate application is required.