Each October, the Social Security Administration (SSA) makes a rather important announcement that outlines to retirees exactly what to expect from the Social Security program in the new year. The most anticipated topic of this annual announcement is the COLA, or Cost of Living Adjustment, increase. The COLA is an increase implemented across all benefits in order to account for the effects of year over year inflation. The SSA uses inflation data from a subset of the CPI called the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) for the third quarter of the year as measured against the same data fro the previous year in order to calculate the COLA each year.
For 2025, the COLA came in 2.5%, with projections for the 2026 COLA standing marginally higher at 2.7%. Despite the (estimated) slightly higher COLA for 2026, the increase may still fall short in fulfilling its purposes due other projected increases. Here is what you need to know.
2026 COLA estimates
The COLA is determined by measuring the CPI-W for the third quarter of the current year against the third quarter CPI-W of the previous year. If there is an increase, this becomes the next COLA and all benefits will be adjusted accordingly in January. If there is a decrease or no change, the COLA will merely default to zero so retirees can rest easy knowing that their benefits will always increase in the face of inflation and never decrease due to deflation.
The CPI-W is released on a monthly basis by the Bureau of Labor Statistics and as such, Social Security experts often share and update projections for the next COLA with each passing month. Following the release of the CPI-W for both July and August (which will also be used in the official COLA calculation), The Senior Citizen’s League (TSCL) has projected a COLA of 2.7% for 2026. “It would raise the average monthly benefit for retired workers by $54, from $2,008 to $2,062,” the TSCL wrote.
Parallel to the COLA increase, another increase has also been projected and it is less than desirable. According to the 2025 Medicare Trustees report, the Part B premium is expected to face an 11.6% increase in the upcoming year. The Medicare Part B premium — which is automatically deducted from Social Security benefit checks — currently sets seniors back by $185, however, if this increase is implemented, the premium cost will jump up to around $206. Due to this premium hike, the average retiree will only see around $33 more in their checks in January despite the COLA increase being $54 on average in actuality, assuming that other expenses remain stagnant.
“A jump of $21.50 would be very close to setting the record for the highest premium jump in terms of dollars, in program history, which was $21.60 per month set in 2022,” Social Security and Medicare policy analyst Mary Johnson noted. “I can report that the stress and anger levels of my older friends, neighbors and new acquaintances is very high and Medicare costs are a top concern.”
Other changes to be announced
Alongside the COLA announcement, the SSA will also reveal the following:
- the new earnings test limit
- the new wage cap
- the new earnings requirement for work credits
- the new maximum benefit amount
The Bureau of Labor Statistics was previously scheduled to release the CPI-W for September on October 15th, with the SSA making the official announcement later that day. Since October 1st, however, the federal government has been shutdown and the majority of staff at the Bureau of Labor Statistics have been furloughed as a result. As such, the COLA announcement will be delayed until the shutdown ends.
“A government shut down could potentially delay an announcement of the COLA, but remember, the data is for September and that has already been collected,” Johnson noted. “So the data shouldn’t be skewed.”