First Financial Consulting was featured in Fast Company in an article examining how the 2027 Social Security cost-of-living adjustment will also affect military retirement and Department of Veterans Affairs disability benefits.
The 3.6% increase is expected to raise qualifying military retirement and VA disability payments beginning December 1, with veterans receiving approximately $36 more per month for every $1,000 in benefits.
Greg Welborn on Why the COLA May Benefit Veterans Differently
Greg Welborn, Principal and financial advisor at First Financial Consulting, explains that veterans receiving disability benefits may experience a greater net benefit from the COLA than many Social Security recipients.
He notes that VA disability benefits are tax-free, meaning recipients do not owe income tax on the increase. Veterans receiving these benefits also will not see the increase reduced by higher Medicare premiums, which can offset part of a Social Security COLA for some retirees.
Key Takeaways from the Article
- VA disability and military retirement benefits are set to increase 3.6%
- The increase amounts to roughly $36 per month for every $1,000 in benefits
- VA disability benefits are tax-free, allowing recipients to retain the full increase
- Medicare premium increases do not reduce VA disability benefits
- The actual value of a COLA depends on the type of benefit being received and the recipient’s broader financial situation
Overall, the article highlights an important distinction in how cost-of-living adjustments affect different groups of retirees. For veterans receiving tax-free disability benefits, the 2027 COLA may provide a more meaningful increase in take-home income than it does for some traditional Social Security recipients.
