Now that the official Cost of Living Adjustment (COLA) announcement has finally passed us, bringing with it the confirmation of a 2.8% increase across all benefits, the next question is: when does the increase go into effect?
Whilst the annual COLA increase is announced in October each year, the increase will only be implemented to all benefits in the new year, meaning the benefit for January 2026. The reason the COLA is announced in October relates back to the way the percentage increase is calculated. The Social Security Administration (SSA) uses CPI data for the third quarter of the year in its calculation. Once the September CPI becomes available the SSA can calculate the next COLA, hence the announcement being made in October as soon as the COLA has been determined.
The COLA announcement had faced some delays this year due to the ongoing federal government shutdown. Fortunately, the delay was short and retirees across the country were still able to receive the COLA announcement in October. The COLA was announced on the 24th instead of the 15th.
Why do Social Security benefits receive a COLA increase?
The implementation of the annual COLA increase ensures that all benefit checks are able to retain its buying power as the costs of goods and services rise. It is an annual adjustment of benefit amounts that is done in order to account for year over year inflation. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for July, August, and September of the current year is measured against the CPI-W for the same period of the previous year so as to determine the COLA.
In 2025, all benefits disbursed by the SSA received a modest 2.5% increase, and in 2026, all benefits will be receiving a 2.8% increase. Whilst the 2026 COLA is marginally higher than the 2025 COLA, it still is on the smaller side overall, particularly within the last five years. The highest COLA increase on record was the 1980 COLA which brought seniors a substantial 14.3% benefit increase. In more recent years, the highest COLA of the past decade was the 2022 COLA of 8.7%.
A higher COLA is a naturally desired outcome as beneficiaries anticipate this annual announcement, however, a higher COLA is a far more nuanced scenario than one would like. The logic is simple, a COLA increase is calculated using inflation data. As such, a higher COLA effectively translates to higher costs for goods and services.
The COLA has been calculated automatically since 1975, and since then, there have only been three years where the COLA came in at 0%. This occurred in 2009, 2010, and 2015. It is also worth noting that if there is a decrease in inflation from the previous year to the current year, your benefits will not be reduced. Instead the COLA just defaults to 0%.
Who will receive the COLA increase first?
Likely due to the high volume of recipients, the SSA spreads out its payment days throughout the month. Social Security benefit checks are rolled out on the second, third, and fourth Wednesday of each month. The recipient’s date of birth will determine the specific Wednesday on which they will receive their benefit checks.
Since the SSA has already shared its payment calendar for 2026, the first batch of Social Security recipients who will receive their benefit checks with the COLA increase included are those with birth dates from the 1st to the 10th of their respective birth month, and this will take place on Wednesday, January 14th, 2026.
If, however, the recipient has been receiving Social Security before May of 1997, or if they are receiving both Social Security and the Supplemental Security Income, then the Social Security check will be paid on January 2nd, 2026. A retiree earning the average benefit amount (around $2,008) will receive an additional $56 in their benefit once the COLA increase takes effect.