October isn’t only important because it’s Halloween month! For millions of Americans who rely on Social Security, October brings about an important announcement. This is the month where the government announces the cost-of-living adjustment (COLA) for the coming year. What is COLA you may ask? Well COLA makes sure the beneficiaries keep up with the rising cost of the economy, in other words, with the rising cost of inflation.
The U.S. Bureau of Labor Statistics (BLS) will release the inflation data for September on the 15th of October 2025. This important piece of information is what the Social Security Administration (SSA) to calculate the COLA for 2026.
Why the Bureau of Labor Statistics Data Matters
Even though the BLS releases inflation information every month, September 2025 is more significant because its inclusive of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is used by the SSA to calculate the COLA.
However, the COLA is not calculated by the SSA using CPI-W data for the whole year. Rather, the organisation contrasts the CPI-W figures from the current year’s third quarter with those from the same quarter last year.
How the COLA Is Calculated
Here’s how the calculation works:
- The BLS releases the CPI-W data for July, August, and September.
- The SSA takes the average of those three months.
- The identical three-month period from the previous year is then compared with that average.
- The percentage difference becomes the COLA for the next year.
For this reason, the September is extremely important for calculating the COLA for 2026.
What Happens After October 15
As soon as the inflation data is published, the SSA will announce the 2026 within a matter of a few days. This increase will then be applied to benefits starting in January 2026. To find out their COLA amount, Social Security retirees should visit the SSA’s Communications Corner website.
Why This Matters for Retirees
There are many retirees who rely on Social Security as their primary source of income. Therefore, small increases can make a major difference when it comes to monthly expenses such as food, rent, utilities and healthcare.
Retirees can better prepare by knowing when the COLA will be released. For instance, if the change is little, someone on a limited budget may begin to consider if they will need to make more cuts. However, retirees could have more breathing room in 2026 if the COLA is higher than anticipated.
An Important Point to Remember
Regardless of the precise COLA amount, don’t expect to get it entirely in your bank account. The reason for this is that Medicare Part B premiums are deducted from Social Security income for the majority of retirees. In 2026, those premiums are predicted to increase by 11.6%. That is sufficient to counteract around 40% of a COLA of 2.7% for people who get the typical retirement payment from Social Security.
The Bottom Line
For Social Security beneficiaries, the 15th of October is more than just another day. It’s the day when the SSA gets the information it needs to announce the 2026 COLA.
Many retirees rely on this information because it determines how much their monthly benefits will be from January 2026. This will make a major difference in how they manage their budgets. It is important for beneficiaries to plan ahead and make proactive decisions to avoid financial stress.
Be sure to keep up to date with verified information and follow the SSA website for updates. It is important for you to know what changes are made and how it affects your benefits.