Railroad Retirement COLA 2027: Tier I +3.6%, Tier II +1.2%
How each part of the annuity adjusts
| Component | Jan 2027 increase | Rule |
|---|---|---|
| Tier I | 3.6% | Full CPI increase, same as Social Security |
| Tier II | 1.2% | 32.5% of the CPI increase, by statute |
| Vested dual benefit payments | 0% | Not adjusted for cost of living |
| Supplemental annuities | 0% | Not adjusted for cost of living |
For comparison, the January 2026 adjustment was 2.8% on Tier I and 0.9% on Tier II. Because most annuities blend the two tiers, the overall increase on a typical total annuity lands between 1.2% and 3.6%, weighted toward Tier I.
The RRB's published averages
| Average monthly annuity | Before | January 2027 | Increase |
|---|---|---|---|
| Regular employee annuity | $3,655 | $3,761 | +$106 |
| Employee + spouse, combined | $5,258 | $5,407 | +$149 |
| Aged widow(er) | $2,151 | $2,218 | +$67 |
Source: U.S. Railroad Retirement Board news release, "Railroad Retirement Benefits Will Increase Due to Cost-of-Living Adjustment" (October 2026). Averages across all annuitants in each class; your percentage mix of Tier I and Tier II decides your own dollar increase.
Two caveats that catch people out
The 2001 Act widow(er) rule. Widow(er)s whose annuities are paid under the Railroad Retirement and Survivors' Improvement Act of 2001 do not receive annual COLAs until their annuity is exceeded by the amount that would have been payable under prior law, counting all interim COLAs. The RRB says almost 29% of widow(er)s on its rolls are paid under the 2001 law — if your widow(er) annuity does not move in January, this is the likely reason.
The Social Security offset. If you also receive a Social Security benefit, Tier I is reduced by that benefit — so the Social Security COLA (also 3.6%) offsets the Tier I increase rather than stacking on top of it. The railroad increase applies from the January 2027 annuity; the RRB mails individual rate notices in late December 2026. Compare with the other programs in this family: VA disability · CSRS/FERS · military retired pay.
Frequently asked questions
Why does railroad Tier II rise by only 1.2%?
By statute, Tier II benefits are adjusted by 32.5% of the CPI increase rather than the full amount. 32.5% of 3.6% is 1.17%, which the RRB applies as a 1.2% increase for January 2027. Tier I — the Social-Security-equivalent layer — rises by the full 3.6%.
Do all parts of a railroad annuity get the increase?
No. Vested dual benefit payments and supplemental annuities are not adjusted for cost of living at all. And widow(er)s whose annuities are paid under the Railroad Retirement and Survivors' Improvement Act of 2001 — about 29% of widow(er)s on the rolls — do not receive annual COLAs until their amount is exceeded by what prior law would have paid, counting interim increases.
I receive both railroad retirement and Social Security. What happens?
The Tier I portion is reduced by the amount of your Social Security benefit, so a COLA on the Social Security side offsets the Tier I increase — the RRB adjusts the offset as the new Social Security amounts take effect. Your Tier II portion is unaffected by the offset.
When does the railroad COLA start?
With the January 2027 annuity. The RRB mails notices of the new annuity rates in late December 2026; the averages it publishes are: employee annuity $3,761 (+$106), employee-and-spouse $5,407 (+$149), aged widow(er) $2,218 (+$67).
Source: U.S. Railroad Retirement Board (rrb.gov), October 2026 COLA news release. Figures are the RRB's published averages and statutory percentages.