Social Security COLA for 2026

📰2026 COLA is 2.8%📈

CPI-U YTD is 2.9% and it was 2.9% in 2024 yet the COLA for the full year is only 2.8%.

Do not forget that the base rate subject to the combined 15.3% (16.2% if you make over $200K) total Payroll Tax goes up faster than inflation each year.

"Nobody" in government talks about the massive tax increase on middle income earnings which is the much higher percentage increase (4.8%!) in the maximum earnings subject to the tax. 

Press Release

Maximum Taxable Earnings by year

Excerpt from my next newsletter.

Payroll Tax Rates

Kirk Lindstrom's Investment Letter 

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Full Press Release

https://content.govdelivery.com/accounts/USSSA/bulletins/3f83cb8

Social Security COLA for 2016

There will be no Cost of Living Adjustment to 2016 Social Security payments.  For details including the tax rate and maximum income subject to Payroll Tax deductions, see:

• 2016 Social Security COLA
  and
• Past COLAs by Year
  The highest COLA since 1975 was 14.3%!

Social Security COLA for 2014

Today the Social Security Administration announced the cost-of-living adjustment (COLA) for 2013. Here are the details from the Press Release:

Social Security Announces 1.5 Percent Benefit Increase for 2014

For those of us still working, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase 2.9% to $117,000 from $113,700.

From the official website:

Monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 63 million Americans will increase 1.5 percent in 2014, the Social Security Administration announced today.

The 1.5 percent cost-of-living adjustment (COLA) will begin with benefits that more than 57 million Social Security beneficiaries receive in January 2014.  Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2013.

Some other changes that take effect in January of each year are based on the increase in average wages.  Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $117,000 from $113,700.  Of the estimated 165 million workers who will pay Social Security taxes in 2014, about 10 million will pay higher taxes as a result of the increase in the taxable maximum. 

Information about Medicare changes for 2014 is available at www.Medicare.gov. 

The Social Security Act provides for how the COLA is calculated.  To read more, please visit www.socialsecurity.gov/cola. 

How is a COLA calculated?  [From Latest Cost-Of-Living Adjustment]

The Social Security Act specifies a formula for determining each COLA. According to the formula, COLAs are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-Ws are calculated on a monthly basis by the Bureau of Labor Statistics.

A COLA effective for December of the current year is equal to the percentage increase (if any) in the average CPI-W for the third quarter of the current year over the average for the third quarter of the last year in which a COLA became effective. If there is an increase, it must be rounded to the nearest tenth of one percent. If there is no increase, or if the rounded increase is zero, there is no COLA.

COLA Computation
The last year in which a COLA became effective was 2012. Therefore the law requires that we use the average CPI-W for the third quarter of 2012 as the base from which we measure the increase (if any) in the average CPI-W. The base average is 226.936, as shown in the table below.

Also shown in the table below, the average CPI-W for the third quarter of 2013 is 230.327. Because this average exceeds 226.936 by 1.5 percent, the COLA effective for December 2013 is 1.5 percent. The COLA calculation, with the result rounded to the nearest one-tenth of one percent, is:

(230.327 - 226.936) / 226.936 x 100 = 1.5 percent.

	CPI-W for—
	2012	2013
July	225.568	230.084
August	227.056	230.359
September	228.184	230.537
Third quarter total	680.808	690.980
Average (rounded to the nearest 0.001)	226.936	230.327

Table of Social Security COLAs by Year

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"Kirk Lindstrom's Investment Letter"

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Social Security COLA for 2013

Today the Social Security Administration announced the cost-of-living adjustment (COLA) for 2013. Here are the details from the Press Release:

Social Security Announces 1.7 Percent Benefit Increase for 2013

Monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 62 million Americans will increase 1.7 percent in 2013, the Social Security Administration announced today.

The 1.7 percent cost-of-living adjustment (COLA) will begin with benefits that more than 56 million Social Security beneficiaries receive in January 2013. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2012.

Some other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $113,700 from $110,100. Of the estimated 163 million workers who will pay Social Security taxes in 2013, nearly 10 million will pay higher taxes as a result of the increase in the taxable maximum.

Information about Medicare changes for 2013, when announced, will be available at www.Medicare.gov. For some beneficiaries, their Social Security increase may be partially or completely offset by increases in Medicare premiums.

The Social Security Act provides for how the COLA is calculated. To read more, please visit www.socialsecurity.gov/cola.

Table of Social Security COLAs by Year

From http://www.ssa.gov/oact/cola/latestCOLA.html

How is a COLA calculated?

The Social Security Act specifies a formula for determining each COLA. According to the formula, COLAs are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-Ws are calculated on a monthly basis by the Bureau of Labor Statistics.

COLA Computation

The last year in which a COLA became effective was 2011. Therefore the law requires that we use the average CPI-W for the third quarter of 2011 as the base from which we measure the increase (if any) in the average CPI-W. The base average is 223.233, as shown in the table below.

Also shown in the table below, the average CPI-W for the third quarter of 2012 is 226.936. Because this average exceeds 223.233 by 1.7 percent, the COLA effective for December 2012 is 1.7 percent. The COLA calculation, with the result rounded to the nearest one-tenth of one percent, is:

(226.936 - 223.233) / 223.233 x 100 = 1.7 percent.

	CPI-W for—
	2011	2012
July	222.686	225.568
August	223.326	227.056
September	223.688	228.184
Third quarter total	669.700	680.808
Average (rounded to the nearest 0.001)	223.233	226.936

Social Security COLA for 2012

Today the Social Security Administration announced the cost-of-living adjustment (COLA) for 2012. Here are the details from the Press Release:

Social Security Announces 3.6 Percent Benefit Increase for 2012

Cost-of-Living Adjustment is First Since 2009

Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 60 million Americans will increase 3.6 percent in 2012, the Social Security Administration announced today.

The 3.6 percent cost-of-living adjustment (COLA) will begin with benefits that nearly 55 million Social Security beneficiaries receive in January 2012.  Increased payments to more than 8 million SSI beneficiaries will begin on December 30, 2011.

Some other changes that take effect in January of each year are based on the increase in average wages.  Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $110,100 from $106,800.  Of the estimated 161 million workers who will pay Social Security taxes in 2012, about 10 million will pay higher taxes as a result of the increase in the taxable maximum. 

Information about Medicare changes for 2012, when announced, will be available at www.Medicare.gov.  For some beneficiaries, their Social Security increase may be partially or completely offset by increases in Medicare premiums. 


The Social Security Act provides for how the COLA is calculated. To read more, please visit www.socialsecurity.gov/cola.

Table of Social Security COLAs by Year

Flat COLA: No Social Security Cost of Living Adjustment for 2011

There will be no fizz in Social Security checks for the new year.  The Social Security Administration announced "There will be no increase in Social Security benefits payable in January 2011, nor will there be an increase in SSI payments."

COLA Computation

• The last year in which a COLA became effective was 2008. Therefore the law requires that we use the average CPI-W for the third quarter of 2008 as the base from which we measure the increase (if any) in the average CPI-W. The base average is 215.495, as shown in the table below.
• Also shown in the table below, the average CPI-W for the third quarter of 2010 is 214.136. Because there is no increase in the CPI-W from the third quarter of 2008 through the third quarter of 2010, there is no COLA for December 2010.

	CPI-W for—
	2008	2010
July	216.304	213.898
August	215.247	214.205
September	214.935	214.306
Third quarter total	646.486	642.409
Average (rounded to the nearest 0.001)	215.495	214.136

Remember that the price of oil peaked during the three months in 2008 when the COLA for 2009 was set at 5.8%. 

Chart showing oil prices vs the S&P500.
click image to see a larger version

With oil prices the past three months about half their peak value, CPI is slowly catching up but still below the 2008 calculation. The good news for seniors is they benefited from a higher SS payment than they would have received if the 2009 COLA was set a few months later after the price of oil crashed to $35 at the end of 2008.

Here is a chart and current quote for crude oil prices.

Since this blow-up of CPI in 2008 due to high oil prices, I've reported CPI by month in my newsletter in a table so you can see what to expect. CPI peaked in July 2008 at 219.964. I show this value in Red. This September the CPI recovered to 218.439, still slightly below its 2008 peak. CPI for 2008 was only up 0.1% but Social Security beneficiaries got a 5.8% adjustment because of the spike in oil prices. They were very, very lucky to get a 5.8% raise while the rest of the country got fewer hours or lost jobs during the recession.

This table Automatic Social Security Cost-Of-Living Adjustments by Year clearly shows the January 2009 adjustment of 5.8% was the largest since July 1982!

Since actual CPI was effectively lower than what Social Security recipients were getting paid for, taxpayers were very generous to retired people at a very good time... during this recession. My guess is the CPI will make a new high in the next few months and COLAs will show up again next year for 2012.

Table of Social Security COLAs by Year

Current Oil Prices and New Graph
Click for a chart and current quote for crude oil prices.
.