Social Security Just Received Its First Data Point to Determine the 2026 Cost-of-Living Adjustment (COLA). Here’s Where Things Stand Now.
Increased number of retirees, Social security To meet the end.
In the latest repetition of an annual survey from Gallup, 62% of retirees said that social security is an important source of income for them. This came from 60% last year. 24 % said that monthly benefits represents a small source of income in retirement.
For any retirement that uses social security payments as a key factor in planning their budgets, a few things have a greater effect on spending plans than setting an annual life cost or COKE. Cola has been designed to help social security payments to meet the increasing cost of goods and services, but in recent years, the prices of inflation have increased in almost everything.
Although there are still two months to be available for 2026, the retirees received the first data point to determine how much they will receive next year. Here are things.
Before dived into the latest data point, it is important to understand exactly how the Social Security Administration (SSA) calculates Cola every year.
Many people know that Cola depends on inflation, but there is a very special measure of inflation used to determine the exact number. This is called the consumer price index for urban wages and office workers (CPI-W). The index is calculated by the Office of Statistics, which is based on the polls of the prices taken throughout the country. There are more than 200 price categories of catalogies and each receives a certain weight in the calculation of the total index.
To determine Cola, SSA only looks at the CPI-W readings from the third quarter (July-September). From these three months onwards, the annual increase in the average CPI-W will be Cola for the following year.
BLS released the CPI numbers on July 12th on August 12th. The first data point to determine Cola next year. August CPI numbers will be released on September 11 and September numbers will be released on 15 October. At this point, all the necessary data to calculate the 2026 Cola will be available.
The July CPI report was lower than expected. The commonly reported CPI-U was 2.7% higher than last year. However, the core CPI, which eliminates variable food and gas prices, overcomes expectations and increased by 3.1% from year to year. The higher basic CPI number shows that the elderly may face significant pressure on the increasing costs next year, because food and fuel prices are finally rising.
