In October, millions of people in the United States will be watching a number. It's not a lottery, but it can directly affect retirees' wallets. It's the official announcement of the COLA for 2026.
SSA has already confirmed the key date: October 15, 2025. On that day, it will be revealed how much Social Security benefits will increase due to inflation.
What is COLA and how does it affect your income?
COLA is the cost-of-living adjustment, a percentage that's added to Social Security benefits every year. Its goal is simple: to prevent inflation from reducing the purchasing power of those who depend on those payments. How is it calculated? By using data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Prices from the third quarter of this year (July, August, and September) are compared to those from the same period last year. If there's an increase, COLA goes up; if not, benefits are kept the same. This has only happened on three occasions: 2010, 2011, and 2016.
Predictions for the 2026 COLA are not encouraging
Although the official figure will be announced in October, there are already estimates. The Senior Citizens League calculates a COLA of 2.6%. Mary Johnson, an independent analyst, mentions 2.7%. These figures aren't low, but they might not be enough; prices keep rising and, in addition, other costs will also increase.
Among them are Medicare Part B premiums, which worries experts. It's not uncommon for that medical expense to consume a good part of the COLA. Some beneficiaries might see the increase disappear as soon as the monthly deductions are applied.
Mary Johnson has warned that increases don't always make up for the real costs. This is especially true for those who have low incomes or depend solely on Social Security.
What else will be revealed in October?
In addition to COLA, SSA will announce other important figures. Social Security tax wage limits will be updated. The maximum monthly benefit and the earnings test limit will also be revealed.
Another key figure will be the earnings needed to accumulate work credits. All of this will be revealed along with COLA on October 15.
Until then, all that's left is to follow the predictions and wait. But one thing is clear: whatever is announced that day will impact millions of households across the country.