Last year, we already new the COLA adjustment by late October. However, the Government shutdown has disrupted a thousand little things, and the COLA number is just one of them. However, the SSA has made it official that it will finally publish the 2026 COLA at 8:30 a.m. Eastern Time this coming Friday, October 24, 2025. It may not be broadcasted like the Oscars, but millions of Americans will be paying attention to the final announcement.
The Domino Effect of the Government Shutdown
Yes, we can blame the entire government. Specifically, the federal government shutdown. In order for the Social Security Administration to calculate the COLA, it needs very specific and crucial data from another agency. This data is none other than the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for September, which is usually compiled by the Bureau of Labor Statistics (BLS).
With the federal government shut down, many BLS employees are unable to work and therefore cannot process and publish economic data on time. Without the September data, the cola formula cannot be completed… That is why we have been kept in suspense until this week. As soon as the staff returns to their posts, the pending data and the official announcement can be made on the same day. That is why it has already been calculated that the final reports will be released next Friday, October 24.
Everything you need to know about COLA
If you have recently started receiving Social Security benefits, you may not fully understand what COLA is. The Cost-of-Living Adjustment is an annual increase applied to Social Security benefits (retirement, disability, survivors) and SSI. It is not a merit increase or bonus, but rather an adjustment to ensure that beneficiaries’ purchasing power does not erode with inflation.
The COLA’s goal is to make sure SS beneficiaries are able to keep their purchase power. The SSA wants to make sure that you are able to keep –let’s say— adding the same groceries to the shopping cart without having to switch to cheaper substitutes every single year. It’s a very important calculation: more than 70 million Americans depend on it.
The COLA is calculated automatically using a formula established by law since 1975. As mentioned above, the SS compares the average CPI-W for the third quarter (July, August, and September) of the current year with the highest average for the third quarter of the previous year. This report tracks the cost of goods and services in the United States. If there is a percentage increase, this percentage is rounded to the nearest tenth and becomes the COLA for the following year. If there is no increase in the CPI-W, there is no COLA.
It should be noted that the increase announced this Friday, October 24, 2025, will only take effect for payments made from January 2026 onwards.
Waiting for the COLA announcement
While we wait for the official figure, there are already some fairly detailed projections. According to estimates by The Senior Citizens League, the COLA for 2026 will be approximately 2.7%. This represents a slowdown in inflation compared to the years immediately following the pandemic.
What does 2.7% mean in real money? Well, for the average retiree, whose monthly benefit is around $2,000, an increase of just 2.7% translates into an extra $54 per month in their check. However, other factors must be taken into account: if Medicaid Part B premiums rise, part of the COLA increase will automatically go toward this cost. In short, our Social Security pension will not lift us out of poverty overnight.
We mentioned earlier that this year’s COLA seems moderate. To put it in context, the 2023 COLA was 8.7%, the highest in four decades, driven by strong post-pandemic inflation. The previous year, in 2022, it was 5.9%. It is better to look forward to a low COLA adjustment –or not adjustment at all– since it would mean a more stable economy… and no skyrocketing prices at the supermarket!