What is the story about?
What's Happening?
The Social Security Administration is set to announce the 2026 cost-of-living adjustment (COLA) next month, with experts predicting a 2.7% increase. This adjustment is based on the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The increase is slightly below the 2.9% inflation rate recorded between August 2024 and August 2025. The COLA aims to help beneficiaries keep pace with rising costs, although some seniors feel it does not fully address the inflation they experience. The full retirement age will also increase to 67 for those born in or after 1960, completing the transition from 65 to 67.
Why It's Important?
The COLA adjustment is crucial for nearly 68 million Americans who rely on Social Security benefits. A 2.7% increase would raise the average monthly benefit by approximately $54, providing some relief amid inflationary pressures. However, concerns persist that the adjustment may not fully compensate for the actual cost increases faced by seniors. The change in full retirement age reflects ongoing adjustments to the Social Security system, impacting future retirees' planning and financial security.
What's Next?
The official COLA announcement will be made on October 15, 2025, following the release of CPI-W data for September 2025. Beneficiaries will see the increase reflected in their checks starting January 2026, with payment dates varying based on birth dates. Additionally, the Social Security tax limit is expected to rise, and earnings limits for those below full retirement age will be adjusted, affecting how much beneficiaries can earn while receiving benefits.
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