How is the Social Security COLA calculated?
As mentioned, the COLA computation relies on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Like other measures for inflation, the CPI-W is calculated monthly by the Bureau of Labor Statistics.
Each year, the SSA averages the CPI-W value for the third-quarter months of July, August, and September. The average is then compared to the same value for the prior year. If the current year's average is higher, the percentage increase is the COLA.
For example, the third-quarter CPI-W for 2024 was 308.729. In 2025, the average was 317.265. The percentage difference here is 2.8%, which became the 2026 COLA. Social Security and SSI recipients saw their benefits increase by that percentage in January 2026.
When can I start collecting Social Security?
You can start collecting Social Security retirement benefits at age 62. However, you won't be eligible for your full benefit until you hit full retirement age (FRA), which is 67 for anyone born in 1960 or later. If you claim benefits early, you'll permanently reduce the amount you can collect each month, though the trade-off is that you'll get more checks during your lifetime.
You can also increase your benefits by waiting to collect Social Security past your full retirement age. You can receive an extra 8% for each year you delay past your FRA until your benefit maxes out at age 70.
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