The Social Security Cost-of-Living Adjustment (COLA) plays a vital role in protecting the financial well-being of millions of retirees and people with disabilities across the United States.
This annual adjustment helps offset the impact of inflation, ensuring that the purchasing power of benefits does not decline over time.
By linking benefits to changes in the cost of living, COLA provides an important safety net for those who depend on Social Security income to meet daily needs.
The Social Security Administration (SSA) is responsible for setting this adjustment each year.
The calculation is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) — a widely recognized measure of inflation in the economy.
Knowing when and how COLA is determined, as well as who qualifies, is essential for every beneficiary.
What Is the Social Security COLA?
The Cost-of-Living Adjustment (COLA) is a yearly increase in Social Security benefits designed to keep pace with rising prices.
As the cost of everyday goods and services — like food, housing, and medical care — increases, COLA ensures beneficiaries can maintain their standard of living without losing value to inflation.
Without COLA, the real value of benefits would gradually erode, making it harder for vulnerable populations to cover essential expenses.
Who Is Eligible for COLA Benefits?
Not everyone in the United States automatically receives COLA benefits. This adjustment applies to several groups of Social Security recipients, including:
- Retired workers receiving Social Security retirement benefits.
- Disabled workers under the Social Security Disability Insurance (SSDI) program.
- Survivors of deceased workers who are receiving survivor benefits.
- Individuals receiving Supplemental Security Income (SSI).
If you fall under any of these categories, you can expect your benefit amount to be reviewed and possibly increased based on the upcoming COLA announcement.
Key Date: October 15, 2025
For millions of Social Security beneficiaries, October 15, 2025, is a date to mark on the calendar. On this day, the Social Security Administration (SSA) will officially announce the COLA for 2026.
This announcement will reveal the percentage increase in benefits for the upcoming year, based on the latest inflation data.
The updated amount will take effect starting with January 2026 payments, giving beneficiaries a clear picture of how their income will change.
How the Social Security COLA Is Calculated
The SSA follows a specific formula to determine the annual COLA, ensuring the process is transparent and tied directly to economic data. The steps are as follows:
- Gather CPI-W Data – The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is tracked for the third quarter of the year — specifically July, August, and September.
- Calculate the Average – The CPI-W figures for these three months are averaged.
- Compare to the Previous Year – This average is then compared to the average CPI-W from the third quarter of the previous year.
- Determine the Percentage Increase – If the new average is higher, the percentage difference becomes the COLA increase for the upcoming year.
For example, if inflation over the past year was measured at 3% using CPI-W data, beneficiaries would see a 3% increase in their monthly payments starting in January of the new year.
Why COLA Matters for Beneficiaries
COLA adjustments are not just technical calculations — they have a direct impact on the daily lives of millions of Americans.
For retirees, the disabled, and low-income households, even a small percentage increase can mean better coverage of housing costs, groceries, or medical bills.
Without these annual increases, rising prices would reduce the real value of benefits, forcing beneficiaries to make tough choices about basic needs.
Looking Ahead to the 2026 COLA
While the exact 2026 COLA percentage will not be known until October 15, 2025, economic trends — including inflation rates and consumer spending — will influence the outcome.
Higher inflation usually results in a larger COLA, while low inflation may mean a smaller increase.
Beneficiaries should monitor SSA updates and be ready for possible changes in their monthly payment amounts starting January 2026.
The Social Security Cost-of-Living Adjustment is more than just a number — it’s a critical tool for protecting the economic stability of millions of Americans.
By ensuring that benefits keep pace with inflation, COLA allows retirees, disabled workers, survivors, and SSI recipients to maintain their purchasing power year after year.
With the October 15, 2025 announcement approaching, beneficiaries should stay informed about potential changes for 2026.
Understanding how COLA is calculated, who qualifies, and when it takes effect will help recipients plan their finances with confidence.
Frequently Asked Questions
When will the 2026 Social Security COLA be announced?
The Social Security Administration will announce the 2026 COLA on October 15, 2025. This adjustment will apply to benefits starting in January 2026.
Who qualifies for the Social Security COLA increase?
COLA applies to retired workers, disabled workers, survivors of deceased workers, and those receiving Supplemental Security Income (SSI).
How does the SSA calculate the COLA percentage?
The SSA uses CPI-W data from the third quarter of the current year, compares it to the same period from the previous year, and sets the COLA based on the percentage increase.