Social Security COLA, How the Annual Increase Is Set

The Social Security cost-of-living adjustment (COLA) for 2026 is 3.6 percent, according to the Social Security Administration (SSA). As of October 2026, benefits rise by that amount beginning with the December 2026 benefits, which are payable in January 2027. Federal SSI payments rise by the same 3.6 percent, effective for payments made for January 2027.

The number is not a judgment call. A formula in the Social Security Act produces it, and anyone can recompute it from published figures.

1. What a COLA is for

SSA describes the purpose in one line: with COLAs, Social Security and Supplemental Security Income (SSI) benefits keep pace with inflation. Legislation enacted in 1973 created the automatic adjustment. Before 1975, SSA says, benefit increases were set by legislation.

The first COLA was for benefits payable for June 1975. The 1975 to 1982 COLAs were effective with June benefits; since then, COLAs have been effective with benefits payable for December.

2. The formula

COLAs are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as the CPI-W. The Bureau of Labor Statistics calculates it monthly.

The rule works like this:

1. Take the average CPI-W for the third quarter (July, August, September) of the current year.
2. Compare it with the average for the third quarter of the last year in which a COLA took effect.
3. If the current figure is higher, the percentage increase becomes the COLA, rounded to the nearest tenth of one percent.
4. If there is no increase, or the rounded increase is zero, there is no COLA that year.

That second step matters. The comparison is not against last year automatically. It is against the last year that actually produced a COLA. In 2026 that base year is 2025.

3. The 2026 calculation, line by line

SSA publishes the monthly CPI-W values it used.

The increase is (328.746 minus 317.265) divided by 317.265, which is about 3.62 percent. Rounded to the nearest tenth, that is 3.6 percent. The averages in the table come from adding the three months and dividing by three, rounded to three decimals.

4. Recent history

SSA's historical table lists these COLAs for recent years:

The table also shows that some years had no increase. The COLA was 0.0 percent for 2009, 2010 and 2015. The largest in the table is 14.3 percent for 1980.

5. What a COLA does to a monthly check

A COLA is a percentage of the benefit you already receive, so the dollar effect depends on the size of the check. For illustration only, take a benefit of $2,000 a month:

• A 3.6 percent COLA adds $72, for a new total of about $2,072.
• The last three COLAs combined (2.5, 2.8 and 3.6 percent) multiply together to about 1.0916, so $2,000 would grow to about $2,183 over that stretch.

These are arithmetic examples, not predictions. Your own notice from SSA will show your exact new amount.

6. What a COLA is not

A COLA does not guarantee that your costs stay level. It tracks one index, the CPI-W, which measures price changes for a particular group of urban workers. Individual households spend money differently, so personal inflation can run above or below the index.

A COLA also does not change how your starting benefit was figured. It adjusts amounts already being paid.

SSI payments follow the same percentage, but SSA notes that SSI COLAs have generally been effective for the month following the Social Security increase.

7. Key takeaways

• The 2026 COLA is 3.6 percent, as of October 2026, effective with December 2026 benefits payable in January 2027.
• It is set by comparing the average CPI-W of the third quarter against the third quarter of the last COLA year.
• The result is rounded to the nearest tenth of a percent, and no increase means no COLA.
• COLAs have ranged from 0.0 percent (2009, 2010, 2015) to 14.3 percent (1980).
• A percentage increase means bigger checks get bigger dollar raises, so look at your own notice for the exact amount.