Each autumn the Social Security Administration announces the cost-of-living adjustment (COLA) that takes effect for benefits paid starting in January. For 2026, the COLA was 2.8%. The calculation follows a formula set by law, and understanding it helps explain why the raise sometimes feels smaller than rising prices.
Key Takeaways
- The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
- It compares the average CPI-W for July, August and September with the same period a year earlier.
- Medicare Part B premiums are usually deducted from benefits, so a premium increase can absorb part of the COLA.
- Check SSA.gov for the latest announced COLA and your personal benefit amount.
The formula
The Bureau of Labor Statistics publishes the CPI-W monthly. The SSA takes the average for the third quarter (July to September) of the current year and compares it with the third-quarter average from the last year a COLA was applied. The percentage increase, rounded to one decimal place, becomes the COLA. If prices fall, benefits do not decrease; the COLA would be zero.
Automatic annual COLAs began in 1975, following legislation in 1972.
Recent history
COLAs have varied widely with inflation: 5.9% for 2022, 8.7% for 2023, 3.2% for 2024, 2.5% for 2025 and 2.8% for 2026. The announcement typically comes in October, when September inflation data is released.
Why it may not match your costs
The CPI-W measures spending patterns of working households. Older people tend to spend more on healthcare and housing. The Bureau of Labor Statistics publishes an experimental index for older Americans, the CPI-E, which has sometimes risen faster than CPI-W. Proposals to switch the COLA to CPI-E have been introduced but not enacted.
The Medicare effect
Most beneficiaries have Medicare Part B premiums deducted from their Social Security payments. For 2026 the standard Part B premium is $202.90 a month, up from $185 in 2025. Part of the COLA increase goes to cover the higher premium.
A “hold harmless” provision prevents most beneficiaries’ net Social Security payment from falling because of a Part B premium increase.
Other figures that change
The SSA also adjusts other amounts annually, including the maximum taxable earnings for Social Security payroll tax ($184,500 in 2026) and the earnings limits for people who claim benefits before full retirement age and keep working.
Finding your new amount
Your COLA notice is posted in your my Social Security account at SSA.gov in December. You can also receive it by mail.
SSI
Supplemental Security Income payments also receive the COLA.
Frequently Asked Questions
When is the COLA paid? It applies to benefits paid from January.
Is the COLA taxable? Social Security benefits may be partly taxable depending on your income; the COLA increases the benefit amount.
Can the COLA be negative? No. If the index falls, there is no COLA that year.
The bottom line
The COLA follows a third-quarter inflation formula. Check your notice in December and look at your Medicare premium to see what your net payment will be.
