Key Points
- The Social Security COLA equals the rise in the average CPI-W for July, August and September versus the same quarter a year earlier, rounded to the nearest tenth of a percent.
- The 2026 COLA was 2.8%, and the third-quarter 2025 CPI-W average of 317.265 is the base that the 2027 raise is measured against.
- BLS publishes September CPI, the last missing input, at 8:30 a.m. ET on Wednesday, Oct. 14, 2026.
- The raise first shows up in January 2027 Social Security payments; SSI recipients get their January payment on Dec. 31, 2026.
Every October, about 75 million Americans who receive Social Security or Supplemental Security Income (SSI) wait for one number: the cost-of-living adjustment, or COLA. The short answer to how it is set is simple. The raise is not a political decision and it is not the headline inflation rate. It comes from a fixed formula in the Social Security Act that uses one specific price index, measured over one specific three-month window.
Here is how that formula works, what is already known about the 2027 raise, and what to watch when the final data arrives this week.
What is the Social Security COLA?
A COLA is an automatic annual increase in Social Security and SSI payments designed to keep benefits from losing buying power as prices rise. Congress created automatic COLAs in the 1972 Social Security Amendments, and they began in 1975. Before that, benefits went up only when Congress passed a specific law.
Since 1983, each COLA has taken effect with benefits payable for December, which beneficiaries receive in January. That is why a raise announced in October does not reach bank accounts until the new year.
How is the COLA calculated?
The Social Security Administration (SSA) follows a three-step formula:
- Average the CPI-W for July, August and September of the current year. SSA rounds that average to three decimal places.
- Compare it with the same third-quarter average from the last year a COLA took effect.
- Round the percentage increase to the nearest tenth of a percent. If prices did not rise, or the rounded increase is zero, there is no COLA that year.
For 2026, SSA’s math was (317.265 minus 308.729) divided by 308.729, which produced the 2.8% increase now being paid. You can see the full worked example on SSA’s latest COLA page.
Why CPI-W and not the regular CPI?
By law, SSA must use the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W. It is produced by the Bureau of Labor Statistics (BLS) and tracks prices paid by households that earn most of their income from hourly and clerical jobs. The CPI that leads most news reports is the broader CPI-U, so the two can move a little differently in any given month.
That gap is one reason the COLA can differ from the inflation figure people hear on the news. For a plain-English rundown of how the main U.S. price gauges compare, see our explainer on CPI versus PCE inflation.
What do we already know about the 2027 COLA?
Two of the three months are already published. According to BLS data checked at 11:37 a.m. ET on Monday, Oct. 12, the CPI-W stood at 327.104 in July 2026 and 328.481 in August 2026. The base to beat is the third-quarter 2025 average of 317.265.
A simple illustration shows how close the math already is. If September’s CPI-W came in exactly flat with August, the third-quarter average would be 328.022, and the formula would produce a 3.4% COLA. A September reading of roughly 329.05 or higher would round the result up to 3.5%. This is arithmetic on published data, not a forecast; the official percentage exists only once SSA announces it.
Outside estimates point the same way. AARP, for example, has projected a 2027 COLA of about 3.6%. Any result above 3.2% would be the largest raise since the 8.7% increase paid in 2023. Still, treat any number circulating before Wednesday as an estimate.
When will the 2027 COLA be announced?
BLS is scheduled to release the September 2026 Consumer Price Index at 8:30 a.m. ET on Wednesday, Oct. 14, according to its October release calendar. That report completes the three-month window, and SSA has typically announced the new COLA the same morning.
The timing is not guaranteed every year. In 2025, a government shutdown delayed the data, and SSA did not determine the 2.8% COLA until Oct. 24.
When does the raise show up in payments?
The new COLA applies to benefits paid in January 2027. Because SSI is normally paid on the first of the month and Jan. 1 is a federal holiday, SSI recipients receive their January payment at the end of December, so the higher SSI amount arrives on Dec. 31, 2026.
Last year, SSA posted COLA notices in the Message Center of most beneficiaries’ my Social Security accounts in late November and mailed notices in December. Those notices show each person’s exact new payment.
Will your check rise by the full COLA?
Not always. Many retirees have their Medicare Part B premium deducted from their Social Security payment. The standard Part B premium is $202.90 a month in 2026, up $17.90 from 2025, according to the Centers for Medicare & Medicaid Services. The 2027 premium is announced separately, usually in the fall, and any increase reduces part of the net gain from the COLA.
To see the effect in dollars, look at SSA’s own estimate for this year: the 2.8% COLA raised the average retired worker’s benefit from about $2,015 to $2,072 a month, an increase of $57 before any premium change.
What else changes with the COLA?
Several program limits are updated each fall alongside the raise. For 2026 they are:
- Maximum earnings subject to Social Security tax: $184,500
- Earnings limit for beneficiaries younger than full retirement age: $24,480 ($1 withheld for every $2 above it)
- Earnings limit in the year a worker reaches full retirement age: $65,160 ($1 withheld for every $3 above it)
SSA typically publishes the 2027 versions of these figures alongside its COLA announcement.
Recent Social Security COLAs at a glance
| Payment year | COLA |
|---|---|
| 2022 | 5.9% |
| 2023 | 8.7% |
| 2024 | 3.2% |
| 2025 | 2.5% |
| 2026 | 2.8% |
| 2027 | Due after Sept. CPI on Oct. 14 |
The 8.7% raise for 2023 was the largest since 1981, while there was no COLA at all in 2010, 2011 and 2016, when prices did not rise enough over the measurement window.
Related live coverage
Wednesday’s inflation report will also move expectations for Federal Reserve interest rates and Treasury yields. Follow the reaction on our Markets Live center, and for live business TV coverage on release morning, browse the channels on our Watch Live News hub.
Sources
- Social Security Administration, Latest Cost-of-Living Adjustment and COLA history (ssa.gov)
- Social Security Administration, Cost-of-Living Adjustment Information for 2026 and Effect of COLA on Average Benefits (ssa.gov)
- U.S. Bureau of Labor Statistics, October 2026 release schedule and CPI-W series CWUR0000SA0 (bls.gov)
- Centers for Medicare & Medicaid Services, 2026 Medicare Parts A and B Premiums and Deductibles (cms.gov)
- AARP, Social Security COLA Preview for 2027 (aarp.org)
