Key Points
-
The official Social Security COLA will be revealed on Oct. 14.
-
The SSA uses third-quarter inflation data to determine the COLA.
-
Once it is revealed, Social Security recipients can use it to calculate their 2027 Social Security benefit.
-
The Social Security cost-of-living adjustment, or COLA, is something that millions of Social Security recipients watch every year. In simple terms, the COLA provides a much-needed raise to help seniors keep up with the rising costs of living.
However, while millions of seniors will be watching for the COLA, the exact timing of the announcement and how the adjustment is calculated are not well understood by many. So, here’s when you should expect to see the announcement, the formula the Social Security Administration (SSA) uses to calculate it, and how you can determine your own COLA as soon as the official figure lands.
Missed AI’s “Act 1”? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
Image source: Getty Images.
When will the Social Security COLA be announced?
I won’t keep you in suspense. The Social Security COLA will be officially announced on Oct. 14, 2026. The increase won’t be immediate. Rather, it will take effect with the payment you receive in January 2027.
The Social Security COLA is designed to help recipients keep up with inflation. But there are many different kinds of inflation, and different ways to calculate it. Here’s how Social Security does it.
- First, Social Security uses the CPI-W, which is the Consumer Price Index for Urban Wage Earners and Clerical Workers. It’s important to note that this is slightly different from the “headline” inflation numbers you see in the news, which typically refer to the CPI-U.
- Second, Social Security uses third-quarter inflation data. In other words, it takes the CPI-W from July, August, and September, and averages the numbers. September’s data will be available on Oct. 14, which is why that’s the official Social Security COLA date.
- Then, the SSA will compare the three-month average from 2026 to the same average from 2025. This will show the inflation from the third quarter of last year to the third quarter of this year.
- The SSA takes this percentage increase, rounds it to the nearest tenth of one percent, and uses that as the COLA.
It’s worth noting that the date of the official Social Security COLA announcement can be slightly different from year-to-year. It will be announced on the same morning that the September CPI data comes out, and this date can vary from year to year.
How to find your own 2027 COLA
Here’s the quick calculation you can do. Once the 2027 Social Security COLA is revealed, add one plus the percentage of the COLA. For example, if the COLA is 3%, this would be 1.03.
Then, multiply your current Social Security benefit, before any deductions, by this number. As a simple example, if your current monthly benefit is $2,000 and there’s a 3% COLA, multiplying $2,000 by 1.03 shows a new benefit amount of $2,060. It’s worth noting that benefits are rounded down to the nearest dollar, so keep that in mind when calculating yours.
Of course, this isn’t necessarily the amount you’ll receive. If you have Medicare Part B premiums paid directly from your checks, this will be deducted, as will any voluntary federal tax withholdings. So, the percentage increase that is represented by the COLA might not be what is reflected in your Social Security checks.
What will the 2027 COLA be?
We already have inflation data for both July and August, so October is the only missing piece. Based on what we know, the Senior Citizens League (TSCL) projects a 3.5% COLA for 2027, while the AARP projects a slightly higher 3.6%.
While we don’t know for sure, since we already have two of the three required months of inflation data, the official COLA is likely to be close to these forecasts. But we’ll find out on Oct. 14.
The $23,760 Social Security bonus most retirees completely overlook
If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income.
One easy trick could pay you as much as $23,760 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Join Stock Advisor to learn more about these strategies.
View the “Social Security secrets” »
The Motley Fool has a disclosure policy.
