The Cost of Living Adjustment (COLA) happens each year. This change is coordinated by the Social Security Administration (SSA), and impacts millions of people receiving social security and federal pensions. But this year is going to be out late. Why? There was a federal government shutdown that paused the collection of basic economic data.
The Bureau of Labor Statistics (BLS) said the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is going to be released in October 24, which is later than usual and it affects directly the SSA and the Office of Personnel Management (OPM).
For beneficiaries, waiting on confirmations means a huge burden: delay on important purchases, changes on automatic bill payments, or even adjusting their savings balance. For retirees, and those who are close to retirement, they usually coordinate their decisions about Medicare, open enrollment elections, and tax withholdings based on the COLA information. Agencies and unions follow the deadlines from very close too for payroll updates and communications.
A later release of the CPI-W changes everyone’s schedules, increasing the risk of confusion, or having to rush decisions, which is exactly what budget planning tries to avoid.
The United States inflation guides the adjustment that needs to be done, and COLA prevents people for losing their purchasing power. Also, retirement and organizations of social benefits, including CSRS and FERS schemes, is planned by the U.S. economic policy that applies to the day-to-day of federal beneficiaries.
How does COLA work?
This adjustment happens every year so people can still pay their needs when prices are constantly rising. The SSA determines what happens with the CPI-W, and taking in account July, August, and September. If the cost of living increases, COLA will make it so the check doesn’t stay behind.
COLA 2026 will increase between 2.6% and 2.8% this year, or at least, that what the projections says.
Last year was 2.5%, so people are expecting a moderate raise this time. This numbers also define Social Security and federal pensions updates. The OPM usually applies the same percentage to calculate CSRS, but FERS gets a reduced COLA percentage if inflation goes over 2%.
Why it’s taking so long and who’s affected?
The delay is coming from the federal government shutdown, which pushed the CPI-W from September to October. And although staff was reactivated, the calendar is still very tight so this generates uncertainty. This domino effect complicates the final steps of the SSA and OPM, which rely on data to close calculations and communicate adjustments.
Who’s impacted by it?
- Social Security beneficiaries who need the numbers to organize next year’s income and expenses.
- Federal retirees whose payments depend on the CPI-W.
- Federal employees close to retirement because some could postpone their retirement if there’s not enough clarity about the next year’s COLA (since it affects their final income).
The estimated range (2.6%–2.8%) is an exemple guide that goes above the 2.5% from 2025, but it is not the definitive answer yet. And it is not a huge jump either, but it is useful for adapting budgets.
What’s coming next?
The next step is to wait for the CPI-W publication on October 24. And with that information, the Social Security Administration (SSA) and the Office of Personnel Management (OPM) will be able to complete the process and communicate the 2026 COLA results.
This delay changes the way people can organize their budgets and even retirement for next year.
Federal beneficiaries usually follow the official information to prepare scenarios with the protection rates. So once the information is out and complete, people can align their retirement, social benefits, and budgets, and transform those numbers into a daily planning.