Each year in October, Social Security beneficiaries receive an announcement from the Social Security Administration (SSA) informing them of precisely what to expect in their benefit checks starting in the new year. This announcement is known as the Cost of Living Adjustment, or COLA, announcement and it typically takes place during mid-October. For 2025, the COLA was announced at 2.5% and all benefit amounts were adjusted accordingly as of January. Projections for the next COLA stand at 2.7%, and if this figure holds steady, the highest possible benefit check will surpass the $5,200 mark.
The COLA is calculated using a subset of the CPI which is released on a monthly basis by the Bureau of Labor Statistics. Inflation data for the third quarter in particular is measured year over year, hence the announcement being made in October each year. Due to the current federal government shutdown, however, the COLA announcement that was previously scheduled for October 15th, will likely be delayed until the shutdown ends and the Bureau of Labor Statistics is able to resume its data collection and processing. Here is everything you need to know.
2026 COLA
The COLA is an annual increase implemented to benefit amounts in order to counter the effects of year over year inflation. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is the particular subset of the CPI that is used in the COLA calculation. The CPI-W for the third quarter of the current year is measured against the CPI-w for the third quarter of the previous and any year over year increase becomes the next COLA. Based off data of the two of three total months used in the calculation, Social Security experts have estimated that the 2026 COLA will be 2.7%.
This is just an estimation and is subject to change following the release of September data, however if this figure maintains the course, a beneficiary receiving the average benefit amount of a little over $2,000 will see a $54 bump in their checks starting in January. In 2025, the highest benefit check paid by the SSA totals to $5,108. Assuming a COLA of 2.7%, recipients of the maximum benefit check will see a healthy $138 bump to their checks in 2025, bringing the monthly total up to $5,246 ($63,000 annually).
Being able to claim the maximum check is unfortunately a rarity as it requires the recipient to have earned at the wage cap or higher for a minimum of 35 years, and they will have to delay claiming until age 70, which is not feasible for most. As mentioned previously, the average benefit check will increase only by $54, assuming a COLA of 2.7%, which is a far cry from $138.
Medicare premiums are also projected to face an 11.6% increase in the year, and since the Part B premium is automatically deducted from benefit checks, the COLA bump for the average beneficiary will likely get lost in these expense hikes. By December, a personalized COLA announcement should be sent to you outlining the exact amount you will see in your benefit checks in the new year.
COLA announcement delay
Due to the federal government shutdown that has been in effect as of Wednesday, October 1st, the Department of Labor, which oversees the Bureau of Labor Statistics, has halted operations due to furloughs. As such, all active data collection has been stopped, and as a result, the September CPI-W report will also face publishing delays, which will in turn delay the COLA announcement.
“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 Department of Labor stated.
It is worth noting that while the COLA announcement may face delays due to the shutdown, the actual implementation of the increase will still go ahead as planned in January.