October is very important month for all beneficiaries of the Social Security program as it is the month in which the Social Security Administration (SSA) announces the COLA for the upcoming year. The COLA, or the Cost Of Living Adjustment, is the percentage by which Social Security benefit amounts are increased each year.
The COLA is added on to benefit amounts on a yearly basis in order to help the average benefit check maintain its buying power in the face of inflation. The COLA is determined in relation to third quarter inflation data, however, policy experts often share estimates of what the next COLA could look like using the currently available inflation data.
Since we are presently in the third quarter of the year, the projections made by experts will likely grow in accuracy as October fast approaches, however, nothing can be said for certain. As such, the predictions for the 2026 COLA are currently standing slightly higher than the COLA for 2025 which came in at 2.5%. Here is what you need to know.
How is the Social Security Cost of Living Adjustment calculated?
The COLA is measured year over year using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) which is released by the Bureau of Labor Statistics. The CPI-W for the third quarter (July, August, and September) of the current year is measured against the CPI-W for the third quarter of the previous year. If there is an increase from the previous year to the current year, this figure becomes the COLA for the upcoming year. If, however, there is a decrease in inflation from the previous year to the current year, your benefit amount will not be decreased and the COLA is announced at 0.0%.
In 2010, 2011, and 2016, the COLA came in at 0%. Conversely, the highest COLAs on record according to the SSA were in 1979, 1980, and 1981 with COLAs of 9.9%, 14.3%, and 11.2% respectively. On average over the past two decades, the COLAs came in at around 2.6%, according to the Senior Citizens League, a nonpartisan senior advocacy group.
COLA predictions for 2026
According to the recent July data that has been released by the Bureau of Labor Statistics, the CPI-W was up by 2.5% from last July to this July. In June, the Senior Citizens League predicted a COLA of 2.5% for 2026 based on the data available at the time. Now that we are currently in the middle of the third quarter of the year, COLA estimates from experts now are much more likely to be accurate compared to estimates from earlier on in the year.
As such, the Senior Citizens League has projected a COLA of 2.6% in July, whilst Mary Johnson — an independent Social Security and Medicare policy analyst — estimates a COLA of 2.7% for 2026. There still remains a little under 2 months before the third quarter passes and an accurate COLA can be determined, and whilst these projections are possibly close to accurate, inflation is often unpredictable.
When President Donald Trump announced the tariff hikes at the beginning of the year, many feared it would deeply impact inflation rates. Now that the tariffs are starting to go into full effect, however, it appears that in terms of inflation and the consumer price index data, the effects of the tariffs are somewhat minimal.
If the estimations are correct and the SSA announces a COLA of 2.7% in October, many beneficiaries might not even notice the modest increase due to the rising costs of Medicare Part B. Medicare Part B premiums are automatically deducted from the benefit check and according to the 2025 Medicare Trustees Report, “the standard Part B premium is expected to increase from $185 to $206.50 in 2026.”
“It’s not uncommon for Part B premiums to consume much or even all of the annual COLA, leaving little extra to cover other big cost increases,” Johnson wrote in a note in July.