The Social Security Administration's annual COLA announcement, a crucial update for 75 million recipients, is delayed due to the government shutdown. Here's what you need to know about the impact on your benefits and the latest inflation data.
Each year, Social Security adjusts benefits based on recent inflation data to ensure recipients maintain their purchasing power. The COLA is determined by the third-quarter inflation figures, which cover July through September. This year, the announcement was scheduled for October 15, coinciding with the Labor Department's release of the September Consumer Price Index (CPI) data.
However, with the government shutdown, the Bureau of Labor Statistics has postponed the release of its latest CPI figures to October 24, about a week later than planned. The Social Security Administration will follow suit, issuing its COLA announcement on the same day.
The estimated COLA for 2026 is around 2.7%, slightly higher than the 2.5% increase in 2025, according to the Senior Citizens League. This projection is based on August inflation data, but the final number may change when September data is included.
AARP predicts a COLA range of 2.6% to 2.9%, which would increase the average monthly payment for retired workers by $54, from $2,008 to $2,062. The September CPI is forecast to rise to an annual rate of 3.1%, up from 2.9% in August, partly due to the Trump administration's tariffs on imports.
Retirees may face financial challenges if prices continue to climb and the 2026 Social Security adjustment doesn't keep pace with inflation. The Federal Reserve forecasts that the Personal Consumption Expenditures price index will rise to 3.1% this year before dropping to 2.6% in 2026.
Despite the delay, the Social Security Administration assures that the new COLA will take effect on January 1, 2026, without further disruptions from the shutdown.
