Once September ends and all inflation data for the third quarter of the year is compiled and released by the Bureau of Labor Statistics, the Social Security Administration (SSA) will officially announce the COLA, or Cost of Living Adjustment for 2026. The Bureau of Labor Statistics is expected to release the relevant CPI data on the morning of October 15th, with the SSA making the official COLA announcement later that evening.
The COLA is an annual increase implemented to all benefit amounts so that the fixed income of retirees can retain its buying buying in the face of growing inflation. Using month to month CPI data as it becomes available, experts often share projections for the next COLA throughout the year — updating their estimates with each passing month. As such, the latest projections for the 2026 COLA are currently standing at around 2.7% and 2.8%, which would translate to an average of approximately $54 more for seniors in the new year.
How is the COLA determined?
Each year since 1975, the COLA has been determined using a subset of the CPI called the Consumer Price Index for Urban Wage Earners, or CPI-W. If there is an increase in the third quarter CPI-W from the previous year to the current year, the percentage increase becomes the COLA for the upcoming year and all benefits are adjusted according in January. If there is a decrease in the CPI-W from the previous year to the present year, the COLA defaults to 0.0%, meaning benefits remain unchanged in the new year.
Listed below are the COLA’s for the last ten years:
- January 2016 — 0.0%
- January 2017 — 0.3%
- January 2018 — 2.0%
- January 2019 — 2.8%
- January 2020 — 1.6%
- January 2021 — 1.3%
- January 2022 — 5.9%
- January 2023 — 8.7%
- January 2024 — 3.2%
- January 2025 — 2.5%
The Senior Citizen League (TSCL) has projected a COLA of 2.7% for 2026 and if this estimation holds steady, seniors receiving the average benefit amount of about $2,008 will be seeing a bump of approximately $54 in their benefit checks in January 2026. TSCL uses its own statistical model which includes inflation, interest rates set by the Federal Reserve, and employment data to determine its COLA estimations.
Social Security expert Mary Johnson, on the other hand, has updated her projections for the next COLA from 2.7% to 2.8%. However, advocates are also concerned that the COLA is going to fall short in adequately addressing the effects of inflation felt by seniors regardless of the latest estimates. Not to mention the projected 12% Medicare Part B premium increase in 2026. If the Part B premium does increase, the average benefit check will lost close to half of the COLA increase before it even reaches seniors since the Part B is automatically deducted from Social Security checks.
“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,” Johnson stated.
CPI-W vs. CPI-E
While the CPI-W does have over 200 pricing categories, the expenditure weight of some of these categories do not translate proportionally to the spending habits and general lifestyles of senior citizens. Simply put, the CPI-W measures the cost of a basket of goods and services purchased by urban and clerical workers, meaning people who are currently in the workforce and presumably much younger with differing priorities. As such, TSCL has previous stated that it advocates for the COLA to be determined using the CPI for the Elderly.
Additionally, in its latest update, TSCL wrote the following under its key insights: “Inflation is substantially higher than our model predicted at the beginning of the year. In January 2025, our model predicted that inflation would cool, and the COLA would come in at 2.1 percent. Instead, the prediction steadily ticked upward throughout the year as the Trump administration implemented economic policy changes, including aggressive tariff policies that some experts say have the potential to increase inflation.”