We're Less Than 1 Month Away From the 2026 Social Security Cost-of-Living Adjustment (COLA) Announcement. Here's Where Things Stand Today.

Key Points

• The annual Social Security COLA is based on an automated calculation based on inflation data.

• We need one more inflation report before we can calculate the exact 2026 COLA.

• The data we have so far point to another big COLA for beneficiaries.

• The $23,760 Social Security bonus most retirees completely overlook ›

Social Security is the backbone of most Americans' retirement plans. The government benefits made up at least half of total personal income for 38.3 million people in 2022, according to data from Pew Research. For many of them, it was much more than half, including 16.4 million people who relied on Social Security for the entirety of their income.

As such, the annual cost-of-living adjustment (COLA) is an extremely important factor built into Social Security. The yearly bump in benefits helps retirees keep up with rising prices for food, shelter, transportation, and other necessities.

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We're currently less than one month away from the Social Security Administration announcing next year's COLA. We're set to receive the news on Oct. 15 this year. But retirees trying to get ahead on their budgeting for next year may want a better idea of where we stand today and what to expect next month.

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The COLA countdown is on

When Social Security first went into effect, the only way seniors could get a cost-of-living adjustment for their benefits was if Congress decided they needed it. Raises were rather arbitrary up until Congress amended the law in the 1970s to automate COLAs annually.

Today, the COLA is a simple calculation based on a measure of inflation known as the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. The CPI-W is based on a monthly survey conducted by the Bureau of Labor Statistics. The survey gathers pricing data from retailers and consumer households, and then weights those prices based on a "basket of goods and services" representative of the typical spending of a working-age city dweller. The Social Security COLA is based on the average year-over-year increase in the CPI-W during the third quarter of every year.

We already have CPI-W numbers from July and August. We'll receive the September CPI-W reading on the morning of Oct. 15. The Social Security Administration will release the 2026 COLA number at about the same time.

The CPI-W increased 2.5% year over year as of July and 2.8% as of August. September's inflation reading could continue to climb higher for multiple reasons, including the fact that inflation cooled last summer. That means even normal month-over-month increases in the CPI reading could lead to a higher year-over-year reading in September this year. Here's what multiple independent analysts think we could see on Oct. 15.

Social Security's 2026 COLA could come in higher than last year

After reviewing the August CPI-W reading, several analysts updated their models with the new information. They all came to the same conclusion. Next year's COLA will be higher than the 2.5% raise beneficiaries received at the start of 2025.

The Senior Citizens League expects retirees to receive a 2.7% cost-of-living adjustment next year. Analyst Mary Johnson sees it climbing 2.8%, as does the Committee for a Responsible Federal Budget.

Costs could continue rising in September as a result of the Trump administration's tariff policies. While some of the impact of tariffs came through in the August data, wholesale inflation data suggests businesses absorbed much of the cost of those tariffs. That trend may reverse in September with more businesses passing on the rising costs of imports. That would lead to a higher CPI reading and a bigger COLA for retirees.

But that's not necessarily good news. Data suggests Social Security beneficiaries suffer a loss of purchasing power when inflation spikes. More volatile pricing can make it more difficult to accurately assess the rising cost of living. It's much better for retirees if prices climb at a slow and steady pace.

What's more, some of the prices climbing fastest are heavily weighted toward the expenses seniors face. Medical and shelter costs are climbing faster than overall inflation. If those necessities make up the bulk of a retiree's budget, they're going to have a more difficult time affording the rest of their normal purchases in retirement.

As things stand, Social Security beneficiaries are in line for a COLA in the 2.7% to 2.8% range, but they'll have to wait a few more weeks to get the exact number.

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