The Social Security COLA is announced in October. Here is what it will and will not tell you

In the second half of October, when the Bureau of Labor Statistics publishes the September consumer price index, Social Security announces the cost-of-living adjustment for the following year. The 2026 adjustment was 2.8%, announced on October 24, 2025. The 2027 figure will arrive on the same schedule, and the coverage will treat it as news. What it changes was largely knowable.

How the number is made

The adjustment is the percentage rise in the CPI-W, the index for urban wage earners, from the third quarter of one year to the third quarter of the next. It is not a policy choice and it is not negotiated; it is the formula in the Social Security Act. It applies to every benefit in payment from the January check, and, through the indexing of the benefit formula, to the benefits of people who have not yet claimed.

What else moves with it

The same announcement resets the figures that shape planning for people still working. For 2026 the taxable maximum, the wage level above which no Social Security tax is due and no benefit is earned, rose to $184,500. The earnings test, which withholds benefits from people who claim before full retirement age and keep working, was set at $24,480 for the year, with $1 withheld for every $2 above it, and $65,160 in the year you reach full retirement age, with $1 withheld for every $3. The average retired worker’s benefit rose from $2,015 to $2,071 a month. Each of these will be restated for 2027 in the October release.

What it does not tell you

It does not tell you what your check will do. The Part B premium is deducted from most Social Security payments, and the 2027 premium is announced separately, in the fall. A 2.8% increase on a $2,071 benefit is $58; a Part B increase of a similar size absorbs most of it. The law’s hold-harmless rule stops the premium rise from reducing your net check below the prior month’s, if the premium is deducted from your benefit and you pay no income-related surcharge, but it does not promise a rise.

It does not tell you when to claim. A COLA applies whether you claim at 62, at full retirement age or at 70, and the delayed retirement credits of 8% a year between full retirement age and 70 are added on top of it. The adjustment never makes claiming early cheaper. And it does not tell you what inflation did to you personally; the CPI-W is a wage earners’ basket, and a retiree’s spending on medical care and housing can run ahead of it or behind it.

The North Jersey angle

New Jersey does not tax Social Security, so the adjustment arrives without a state tax cost and does not count toward the $150,000 total income test for the pension exclusion. One number in the release does reach public employees directly: the pensionable salary cap for PERS and TPAF members in Tiers 2 and later is tied to the Social Security taxable maximum, $184,500 for 2026, so a rise in that figure raises the salary that counts toward your allowance.

What to do with the announcement

Read your own record rather than the headline. A my Social Security account at ssa.gov shows your earnings history and the benefit at each claiming age on your actual record, which is the figure that matters; the Social Security Claiming page explains how to read it. If you want to think through claiming age alongside a pension and the tax picture, start here.

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Reviewed September 12, 2026. Sources: Social Security Administration, 2026 Cost-of-Living Adjustment fact sheet and press release of October 24, 2025; Social Security Act section 215(i).

This article is general educational information and is not advice about when to claim. Adjustments, limits and premiums are set by federal law and change every year. Confirm current figures with Social Security before acting.