Circle October 15, 2025, on your calendar — it’s the day millions of retirees are waiting for. That’s when the Social Security Administration (SSA) is expected to announce the 2026 Cost-of-Living Adjustment (COLA), provided the ongoing government shutdown doesn’t delay it. The decision will affect more than 67 million Americans who rely on monthly Social Security checks to stay ahead of inflation and rising living costs.
For many retirees already stretching their budgets, even a modest COLA increase can mean the difference between stability and financial strain.
What the 2026 COLA Might Look Like
According to projections from the Social Security Board of Trustees and The Senior Citizens League (TSCL), the 2026 COLA will likely be around 2.7%, slightly higher than 2025’s 2.5% adjustment.
That may sound small, but it adds up. For the average retiree earning $2,005 per month, a 2.7% increase translates to roughly $54 more per month — about $648 per year.
“COLA isn’t about making people rich. It’s about keeping them from falling behind — and right now, every little bit helps,”
— Mary Johnson, Senior Policy Analyst at TSCL
How the SSA Calculates COLA
The SSA determines COLA using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), published by the U.S. Bureau of Labor Statistics (BLS).
Here’s how it works:
- The SSA compares the average CPI-W for July, August, and September of the current year to the same period from the previous year.
- If the index rises, benefits go up by that percentage.
- If prices stay flat or drop, benefits remain unchanged.
The September inflation report, due in early October, finalizes the data. If all goes smoothly, the SSA will make the official announcement by mid-October (likely October 15).
The Medicare Connection
While a COLA boost sounds like a win, Medicare Part B premiums often rise simultaneously, eating into that increase.
The Kaiser Family Foundation (KFF) expects only a “modest” hike for 2026 — a few dollars per month — meaning retirees should still see a net gain of $40–$45 monthly on average.
For many, that modest cushion will help cover gas, groceries, or utility bills — essentials that have climbed sharply in recent years.
Why COLA Doesn’t Always Match Reality
Despite annual adjustments, retirees have lost about 40% of their purchasing power since 2000, per TSCL’s Loss of Buying Power report. That’s because the CPI-W tracks expenses for working-age households, not retirees.
Seniors spend more on housing, healthcare, and utilities — categories that typically outpace general inflation. Even with COLA adjustments, these rising costs can leave retirees feeling like they’re treading water.
Still, COLA remains a lifeline. During the high-inflation years of 2022 and 2023, record COLA increases helped millions of older Americans avoid slipping below the poverty line.
What If the Government Shutdown Delays the Announcement?
If the current federal government shutdown continues into mid-October, the COLA announcement could be delayed — but benefit payments will continue on schedule.
Social Security is classified as an essential service, ensuring checks are sent even if administrative offices temporarily close.
“Beneficiaries will not miss their checks, regardless of the budget situation,”
— SSA Spokesperson
Once the government reopens, the SSA will immediately publish the official COLA figure, which will take effect in January 2026.
The Bigger Picture
A 2.7% adjustment won’t radically change household budgets, but it provides consistency after years of volatile inflation. Economists see this smaller increase as a sign of stabilization — an indication that inflation is finally cooling and retirees can plan more confidently.
Financial planners, however, caution against viewing COLA as “extra money.”
“It’s not a raise — it’s protection,” said Anthony Rivera, a financial advisor with The New School’s Retirement Equity Lab. “COLA keeps you afloat, not ahead.”
With inflation moderating and interest rates expected to ease into 2026, retirees might finally be entering a period of economic normalcy — something the past few years have sorely lacked.
FAQs
When will the SSA announce the 2026 COLA?
Expected around October 15, 2025, unless delayed by the government shutdown.
How much is the estimated increase?
Roughly 2.7%, or about $54/month for the average retiree.
When will higher payments begin?
The new benefit amount takes effect January 2026.
Will Medicare premiums reduce my COLA increase?
Yes, slightly — likely trimming about $10–$15 per month.
Can COLA ever be zero?
Yes, if the CPI-W shows no inflation increase.
Could higher benefits affect my taxes?
Possibly. Larger benefits may increase taxable income depending on your total household earnings.
