How the COLA is set
By law, the annual COLA is based on the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The SSA states that after 1983 the COLA is based on the rise in the CPI-W from the third quarter of the prior year to the same quarter of the current year. For 2026, that was the third quarter of 2024 through the third quarter of 2025, and the result was 2.8%.
We checked that against the not seasonally adjusted CPI-W (series CWUR0000SA0) on FRED. The third-quarter average for 2025 over 2024 comes to 2.76%, which rounds to the SSA's 2.8%.
COLAs for 2020 to 2026
| Year | COLA | Cumulative |
|---|---|---|
| 2020 | 1.6% | 1.6% |
| 2021 | 1.3% | 2.9% |
| 2022 | 5.9% | 9.0% |
| 2023 | 8.7% | 18.5% |
| 2024 | 3.2% | 22.3% |
| 2025 | 2.5% | 25.3% |
| 2026 | 2.8% | 28.8% |
Over the same period the CPI-U rose +32% from January 2019 to August 2026, while the seven COLAs shown (2020 to 2026) compound to 29%. The windows are not identical: the COLAs cover third-quarter 2018 to third-quarter 2025, while the CPI-U figure runs from January 2019 to August 2026. Years are the COLA year used in SSA's fact sheets, which is paid starting in January of that year. SSA's history table labels the same COLAs one year earlier, by the December they take effect.
Worked example: a $2,000 monthly benefit
A beneficiary receiving $2,000 a month in November 2019, before the first COLA here took effect, and getting each COLA in the table would see about $2,577 a month in 2026. The 2026 COLA alone added $56 on a $2,000 base (2.8% of $2,000). The same 2.8% on the maximum benefit for a worker retiring at full retirement age, which the SSA lists as $4,152 a month in 2026, is about $112 on the 2025 amount of $4,018.
Assumptions: the starting benefit is round for illustration, no taxes, and no changes to the Medicare premium. A rise in Medicare premiums can be deducted from the check and reduce the net increase.* The SSA publishes the premium details each fall.*
What the 2027 COLA looks like
The 2027 COLA will be set from the third-quarter 2026 CPI-W against third quarter 2025. The data so far covers July and August: the not seasonally adjusted CPI-W averages about 3.5% above the same two months of 2025. That is an unofficial pace, not a forecast. The September reading, due soon, and the final quarter calculation decide it.* The September CPI had not been published when this post was written.
If the final number landed near 3.5%, a $2,000 benefit would rise about $69 a month. Treat it as a scenario.
What the formula does and does not do
The formula compares two third-quarter averages. That makes it a lagging measure: it reflects price changes from the prior summer to this summer, and the raise arrives in January. A price jump in October does not show up until the following year's COLA.
The CPI-W is built from the spending of urban wage earners and clerical workers. That is different from the spending pattern of retirees, who tend to spend relatively more on health care.* Whether that matters depends on which prices rose in a given year. In a year when medical costs rise faster than the average, the COLA can feel too small. In a year when fuel prices fall, it can feel just right.
A COLA also does not mean your net check rises by the same percent. Taxes on benefits, Medicare premiums and changes in your other income all play a part. The numbers in this post describe the gross percentage that the SSA announces, which is the correct starting point and nothing more.
What this means for your wallet
A COLA is meant to keep the purchasing power of a check from falling, but it is based on a specific index and looks backward. It does not weigh the costs older beneficiaries face most heavily. Some advocates argue that a different index would raise payments.* Others disagree.* Whatever the method, the arithmetic above shows the check has grown by the COLAs listed, and the cost of living by the CPI. Compare both with your own bills.
For anyone planning retirement income, the useful point is that part of Social Security is inflation-linked while most savings are not. That shapes how much of your income needs to be inflation-protected.*
Run it with your own numbers
See how a price or a raise compares with inflation using Price Rise vs Inflation Checker. Free, runs in your browser, nothing you type leaves the page.
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Common questions
What was the Social Security COLA for 2026?
2.8%, according to the Social Security Administration.
How is the COLA calculated?
From the increase in the CPI-W from the third quarter of the prior year to the third quarter of the current year, per the SSA.
When is the 2027 COLA announced?
After the September CPI data is released. Check the SSA newsroom for the date.*
Does the COLA cover Medicare premium increases?
Medicare Part B premiums are commonly deducted from Social Security checks, which can reduce the net increase.* Check your SSA letter for the exact figures.
Keep reading
Are wages keeping up with inflation in 2026?How much is $100 from 2019 worth today?All free money toolsSources
- Social Security Administration, 2026 Cost-of-Living Adjustment (COLA) Fact Sheet (ssa.gov/news/en/cola/factsheets/2026.html), retrieved October 4, 2026.
- Social Security Administration, Cost-Of-Living Adjustments history (ssa.gov/oact/cola/colaseries.html), retrieved October 4, 2026. The table labels each COLA by the December it takes effect, so its 2019 to 2025 rows are the 2020 to 2026 COLAs here.
- U.S. Bureau of Labor Statistics, CPI-W, U.S. city average, not seasonally adjusted, series CWUR0000SA0, via FRED, retrieved October 4, 2026. Latest month: August 2026. CPI-U series CPIAUCSL also via FRED.
Notes
- * Statements about Medicare premium deductions, the timing of the 2027 announcement, the debate over using a different index for COLAs, and whether part of retirement income needs to be inflation-protected are commonly stated. They were not independently verified for this post. The 2027 pace in this post is our own unofficial calculation from not seasonally adjusted data and is not an SSA figure.
- Educational only, not financial advice. Figures are historical and are not a promise of future results. Where a statement or number carries a *, it could not be independently checked against a primary source today: check current sources before relying on it.