Retirement has a sneaky way of being more expensive than a lot of people bargain for. It's for this reason that many older Americans end up more reliant on Social Security than they'd like to be.
Of course, some retirees have to depend heavily on Social Security because they don't have savings. But even if you've managed to build up a decent-sized IRA or 401(k) balance, you might still find that you need those monthly benefits to keep up with your bills.
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Retirees have had an especially tough go in recent years given how persistently elevated inflation has been. Though prices have not risen in 2025 at the same rapid pace as 2022, higher costs are still a problem for many seniors on a fixed income. And it's for this very reason that Social Security's annual cost-of-living adjustments, or COLAs, are so important.
The purpose of Social Security COLAs is to help ensure that recipients are able to maintain their buying power from one year to the next. It's for this reason that those COLAs are tied specifically to inflation.
At this stage of the year, many Social Security beneficiaries would like to know what 2026's COLA looks like. And while it's too soon to say with certainty, a major clue should emerge this month.
Why September is such an important month for Social Security
September tends to be a turning point in the year for many people. It signifies the end of summer and a focus toward the new year. It's also a crucial month in the context of Social Security.
Social Security COLAs are based on third quarter inflation readings. In September, the Bureau of Labor Statistics will release its August reading for the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is the specific index used to calculate Social Security COLAs.
Not only that, but the way inflation trends during the month of September will also have a huge influence on what next year's COLA looks like. If inflation ticks upward this month, retirees could be looking at a far more generous COLA in 2026 than the 2.5% raise they received at the start of 2025.
You'll need to sit tight a bit longer
If you're a retiree on a tight budget who's eager to know what next year's Social Security COLA looks like, you may be getting antsy at this point. However, you should know that September's CPI-W reading won't be released until Oct. 15. So that's the day you can tune in for an official COLA announcement from the Social Security Administration.
Until then, there are estimates floating around, but it's important to understand that they're very incomplete. Social Security COLAs are based on three months of inflation data, and so far, we only have a CPI-W reading for July.
Once August's reading comes out, experts may be in a better position to start narrowing 2026's COLA down. But even then, your best bet is to see how September plays out and wait for the official word in October.
In between, if you've been struggling, think carefully about your expenses and whether you have options for reducing them. Also think about ways you can increase your retirement income, such as picking up gig work a few hours a week to supplement your benefits. While a large Social Security COLA in the new year might give you some breathing room, it's important to take active steps on your own to improve your financial situation.
