Each year since 1975, the Social Security Administration (SSA) makes a very important announcement sometime around mid-October. This announcement will reveal the exact figure by which all benefit amounts will increase in the new year. This increase is called the Cost of Living Adjustment, or COLA, and it is implemented to benefit amounts in order to curb the effects of year over year inflation.
The COLA is calculated using data from a subset of the CPI for the third quarter of the current year as measured against the same data for the same period of the previous year. The required data is published on a monthly basis by the Bureau of Labor Statistics, however, due to the federal government shutdown that has been in effect as of October 1st, the Bureau of Labor Statistics has halted operations due to most of its staff being furloughed. Here is everything you need to know.
2026 COLA announcement
The annual COLA increase is determined by measuring the third quarter data of a specific subset of the CPI called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), year over year. If there is an increase from the previous year to the current, that increase becomes the next COLA and all benefits will be adjusted according in January of the new year. If there is a decrease from the previous year to the current year, the COLA will merely default to 0%, meaning that benefits will remain unchanged in the new year.
Two out of the three months of data (July and August) required for the COLA calculation have already been released by the Bureau of Labor Statistics since the agency releases the data only a monthly basis. For 2025, the COLA was announced at a modest 2.5%, however, estimations for the 2026 COLA are seeming to be marginally higher. As such, based of the two months of available data, The Senior Citizen’s League has projected a COLA of 2.7% for 2026. If these projections hold steady and the next COLA is announced at 2.7%, a retiree receiving the average benefit amount of around $2,006, will see a bump of approximately $54 in their checks starting in January 2026.
Prior to the federal government shutdown, the Bureau of Labor Statistics was scheduled to release the September CPI data on the morning of October 15th. However, since a government shutdown is currently underway, the collection, processing, and publishing of the necessary data has been paused and will remain so until the shutdown has ended.
In a release from Monday, the Department of Labor who oversees the Bureau of Labor Statistics, wrote the following: “The Bureau of Labor Statistics would stop operating in the event of a government shutdown — all active data collection would cease.”
Will the shutdown delay the actual COLA increase?
It is important to note that while the COLA announcement will be delayed to the government shutdown, the actual implementation of the increase in January will still continue on as planned. Beneficiaries will merely be required to wait a little bit longer to know exactly how much more money they will receive in the new year.
“A delay of the CPI release during October of each year might have an impact on the Cost of Living Adjustment announcement by the Social Security Administration,” the Labor Department noted.
The last government shutdown occurred nearly seven years ago towards the end of 2018, and lasted 35 days. This was also the longest government shutdown on record in American history. We are currently only on day 2 of the current shutdown, and there still remains approximately 90 days before the next COLA increase is to be implemented. Once the shutdown ends, the agency will resume its duties of processing the relevant data and the SSA will then make the official announcement once the data is released.