Social Security COLA increase: what is it and how is it calculated?
Each year, the SSA calculates the cost-of-living adjustment to keep up with inflation and not affect beneficiaries’ purchasing power.
Every year, the Social Security Administration (SSA) calculates the Cost of Living Adjustment (COLA) for the following year. This adjustment, based on inflation data to preserve recipients’ purchasing power, determines how much Social Security payments will increase in the coming year.
The COLA increase applies to benefits for retired workers, survivors, and recipients of Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). Here’s how it’s calculated and when the new 2026 Social Security payment amounts will be announced.
How is the Cost of Living Adjustment (COLA) calculated?
The Cost of Living Adjustment (COLA) is specifically calculated using the difference between the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the previous year and the current year.
The calculation compares data from the third quarter of the prior year with the third quarter of the current one – that is, the months of July, August, and September for both years. The difference between those figures, in this case between 2024 and 2025, represents the percentage increase that will be applied to Social Security payments for the following year.
When will the 2026 COLA be announced?
The COLA announcement traditionally takes place in October, once all data needed for the calculation becomes available. In 2025, the COLA 2026 announcement was initially scheduled for October 15, but due to the government shutdown, it has been postponed until October 24, when the Bureau of Labor Statistics (BLS) will release the September Consumer Price Index report – the final piece required to determine the new COLA.
According to the latest projections from the Senior Citizens League, the 2026 Social Security COLA could be 2.7%, which would raise the average monthly payment for retired workers by about $54, from $2,008 to $2,062. Once the new COLA is confirmed, Social Security beneficiaries can estimate their new 2026 payments by adding the percentage increase to their current benefit amount.
Although the 2026 COLA will be announced on October 24, the increase will take effect with the January payments, which will be distributed on the following dates:
- Wednesday, December 31: Supplemental Security Income Benefits (Payment for January 2026)
- Friday, January 2: Benefits for those who began receiving payments before May 1997
- Wednesday, January 14: Payments for beneficiaries with birthdates between the 1st and 10th
- Wednesday, January 21: Payments for beneficiaries with birthdates between the 11th and 20th
- Wednesday, January 28: Payments for beneficiaries with birthdates between the 21st and 31st
- Friday, January 30: Supplemental Security Income Benefits (Payment for February 2026)
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