What is the Social Security COLA?
The Social Security Cost-of-Living Adjustment (COLA) is an annual increase in benefits designed to help maintain purchasing power against inflation [1, 5]. It's calculated based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) [1]. Automatic annual adjustments began in 1975, with the increase taking effect for benefits paid in January of the following year [1]. If inflation is negative, the COLA is zero, preventing benefit reductions [1].
How the 2026 COLA is Calculated
The 2026 COLA will be determined by comparing the average CPI-W from the third quarter of 2025 (July, August, September) to the third quarter of 2024 [1]. The Bureau of Labor Statistics provides this data, and the Social Security Administration (SSA) will announce the official percentage on October 15, 2025 [1]. This percentage is then applied to all Social Security benefit types [1].
Key Dates in the 2026 COLA Timeline
- July–September 2025: CPI-W data for the COLA calculation is collected [1].
- October 15, 2025: The Social Security Administration announces the 2026 COLA [1].
- January 2026: New benefit amounts reflecting the COLA take effect [1].
Projected COLA for 2026: The Latest Forecasts
Based on inflation data through late September 2025, forecasts from organizations like The Senior Citizens League and other analysts suggest a modest 2026 COLA [2]. Projections generally fall in the range of 2.7% to 2.8%, indicating moderating inflation [2]. This would be slightly higher than the 2.5% COLA in 2025 but considerably lower than the larger increases in 2022 (5.9%) and 2023 (8.7%) [2].
COLA History Comparison
Here's a look at recent COLA percentages and their approximate impact on average retired worker benefits:
| Year | COLA | Average Monthly Increase for Retired Worker (approx.) |
|---|---|---|
| 2023 | 8.7% | $146 |
| 2024 | 3.2% | $59 |
| 2025 | 2.5% | $50 |
| 2026 (Projected) | ~2.7–2.8% | $54–$56 |
Understanding the Impact on Your Benefits
While a COLA increases your gross benefit, the net amount you receive can be impacted by rising Medicare premiums [2]. Medicare Part B premiums are often deducted directly from Social Security checks [2].
- Offsetting Premiums: Projected increases in the standard Medicare Part B premium for 2026 could reduce the actual net gain from the COLA for many beneficiaries [2]. High-income individuals may also face higher Income-Related Monthly Adjustment Amount (IRMAA) surcharges, further affecting their net benefit [2].
Other Important Social Security Changes for 2026
Several other changes to Social Security are scheduled for 2026:
- Full Retirement Age: For those born in 1960 or later, the full retirement age will reach 67 [3].
- Taxable Earnings Limit: The maximum amount of income subject to Social Security tax is expected to increase [4].
- Earnings Test Limits: For beneficiaries working before their full retirement age, the amount they can earn before benefits are reduced is projected to rise [4].
Preparing Your Finances for 2026
Given the likely modest COLA and potential increase in healthcare costs, proactive financial planning is important [2]. Strategies include reviewing your budget, checking your benefit amount via your My Social Security account, factoring in projected Medicare costs, utilizing senior discounts, and consulting a financial advisor for personalized advice [2].
Conclusion: What to Do Now
The 2026 Social Security COLA is expected to be a modest increase, which may be partially offset by rising Medicare costs [2]. The official figure will be known in October 2025, but beneficiaries should start planning now by reviewing their finances and preparing for potential changes to their net income to maintain financial security in retirement [2].
