The current month of October is shaping up to be a rather stressful month for retirees living on Social Security. October 15th was initially meant to bring with it the highly anticipated COLA increase announcement, however, the start of the month brought with it a federal government shutdown instead. The fortunate news for Social Security beneficiaries is that their benefits will continue to be paid to them as per the official schedule regardless of the shutdown, as confirmed by an October 1st update from the Social Security Administration (SSA).
However, the announcement revealing the next Social Security increase will be delayed indefinitely due to the shutdown. According to information obtained by Grada3, the announcement of the final COLA for 2026 appears to be scheduled for October 24. Social Security benefits are increased annually based on year-over-year inflation, and this increase in benefits is known as COLA, or cost-of-living adjustment. The SSA uses data from the third quarter of the year from a subset of the CPI called the Consumer Price Index for Urban Wage Earners and Clerical Employees (CPI-W) to calculate the COLA. This data is published monthly by the Bureau of Labor Statistics. The federal government went into shutdown before the September data could be released, and therefore the COLA announcement will now face indefinite delays, as the calculation cannot be made without the September CPI-W.
Projections for the 2026 COLA
Whilst the official announcement of the next COLA may currently be facing delays, retirees do still have a relatively close to accurate idea of what to expect from the announcement. Drawing from the CPI data of July and August, The Senior Citizen’s League (TSCL) has projected a COLA of 2.7% for 2026. Since this same inflation data for July and August are going to be used in the official COLA calculation, this estimate will not likely be too far off from the announced figure. If the COLA is announced at the projected 2.7%, seniors earning the average benefit amount will see approximately $54 more in their checks starting in January.
Whilst this projection could be considered close to accurate, there does still remain a possibility of it increasing due to the effects of the recently imposed tariffs. In August, consumer inflation had already spiked due to business passing on higher costs that come about as a result of the tariffs. Furthermore, economists are also of the opinion that the full scope of these inflationary effects are yet to reach consumers, and as such, the expectation is that prices will increase further.
“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,” TSCL explained.
Medicare premium hike
In addition to the possibility of more tariff-related price hikes, the Medicare Part B premium is projected to jump up in the new year, as per the annual Medicare Trustees report. According to the report, the Part B premium is expected to face a staggering 11.6% increase next year. This would bring the price of the premium up from $185 to around $206. Since the Medicare Part B premium is automatically deducted from the benefit check, almost $22 of the COLA will be lost to the payment of this premium.
“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,” independent Social Security and Medicare analyst Mary Johnson noted.
The September CPI-W has not yet been released and as such, the COLA could still come in at a higher percentage which could in turn help better offset the Medicare increase. However, a higher COLA is also something of a double-edged sword because a higher COLA is a direct result of higher inflation.