Each year, Social Security benefits undergo an increase relative to the rate of year over year inflation. This is called the Cost of Living Adjustment, and it is implemented across benefit amounts in order to retain its buying power in the face of growing costs. In 2025, the Cost of Living Adjustment, or COLA, brought retirees a modest 2.5% increase, and projections for the 2026 COLA are standing marginally higher based on the inflation data available to date.
While the Social Security program has been running since 1935, the annual COLA has only been in automatic effect since 1975. Prior to this, any increases that were implemented to benefit amounts due to inflation were done so at the discretion of Congress, and often at random — unlike now, where inflation is measured on a yearly basis and benefits are adjusted accordingly.
The COLA is calculated using inflation data released by the Bureau of Labor Statistics from the third quarter of the year in particular, with the Social Security Administration (SSA) making the announcement around mid-October each year. Due to the current federal government shutdown, however, the COLA announcement will be delayed this year due to the furloughing of staff and ceasing of operations at the Bureau of Labor Statistics. Aside from the new date on which the SSA will make the COLA announcement, here is everything else you need to know about the current 2026 COLA projections.
A higher COLA in 2026
Each year, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter is measured against the CPI-W of the previous year, and the result of this comparison becomes the next COLA if there is an increase. If there is a year over year decrease, the COLA will simply default to 0%, meaning that benefits will never be reduced because of a drop in inflation. Since 1975, there have only been three years where the COLA was announced at 0%: 2010, 2011, and 2016.
Using the CPI data that is available to date (July and August), The Senior Citizen’s League (TSCL) has projected a COLA of 2.7% for the new year. If this estimate holds steady following the release of September’s data and the COLA is officially announced at 2.7%, the average retiree should receive a $54 bump to their benefit checks in the new year (relative to the average benefit amount which currently stands at around $2,006 as per TSCL). On the other hand, retirees who are able to earn the maximum benefit of $5,108 will see a more substantial $138 bump to their monthly checks.
“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 wrote.
It is also worth noting that the Medicare Part B premium is projected to face an 11.6% increase in the new year, according to the Medicare Trustees’ report. This would bring the Part B premium up from $185 to around $206, and since the Part B premium is automatically deducted from benefit checks, a fraction of the COLA increase will be lost before seniors even receive their monthly checks.
COLA announcement delay
The federal government has been shutdown as of October 1st, resulting in a furlough of almost all staff at the Bureau of Labor Statistics. As a result, the processing of the September data required for the COLA calculation has been put on hold. The data was meant to be released on October 15th but now, due to the shutdown, everything remains up in the air.
There still remains a little under 90 days before the COLA has to come into effect, and the longest shutdown on record only lasted for 35 days, so while the announcement will face delays, the actual increase will still likely go ahead as planned.