"For older Americans, this is a very crucial time of the year. Not only is fall when Medicare's open enrollment period takes place, but it's also when the Social Security Administration announces a cost-of-living adjustment, or COLA, for 2026. Many baby boomers on Social Security are hoping that 2026's COLA will be more generous than the 2.5% COLA they received at the start of the current year."
"The nonpartisan Senior Citizens League is projecting that 2026's Social Security COLA will amount to 2.7% based on the inflation readings that have been released to date. Meanwhile, in just a couple of weeks, the Bureau of Labor Statistics is set to release another set of inflation data. And it could have a huge impact on next year's Social Security COLA."
"The purpose of Social Security COLAs is to make sure seniors don't lose out on buying power due to inflation, which is a natural and expected part of the economy. Social Security COLAs are calculated on a specific index called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). When there's an increase in the CPI-W from one year to the next year, Social Security benefits are eligible for an increase."
Fall brings Medicare open enrollment and the Social Security Administration's announcement of the annual cost-of-living adjustment for 2026. Many beneficiaries hope for a COLA higher than the 2.5% granted this year. The nonpartisan Senior Citizens League projects a 2.7% COLA based on inflation readings to date. The Bureau of Labor Statistics will release additional inflation data in a few weeks, and that data could materially change the projected COLA. Social Security COLAs are calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), with year-over-year CPI-W increases driving benefit adjustments.
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