If you are a Baby Boomer and you are collecting Social Security, you have less than a month until one of the most important announcements of the year happens.
You need to be prepared for this announcement, as it will affect your finances going forward. Here is the news that is coming, along with some details on why it is so important to retirees.
This is a big day for Boomers collecting Social Security
Baby Boomers will need to watch the news carefully on October 15, 2025. This key date, which is coming up in under one month, is the date when the Social Security Cost of Living Adjustment (COLA) will be officially announced.
COLAs happen in the majority of years (although not every year). They are also known as Social Security raises, and they are a crucial component of the Social Security benefits program because they increase benefits in order to help retirees cope with inflation.
Inflation is a natural part of life, with prices rising over time. But, since goods and services inevitably get more expensive as time goes on, seniors need to have their retirement benefits adjusted upward to avoid losing buying power. While there are some concerns that the formula isn’t working as well as it should, the reality is that it does at least boost retiree income in most years, and these raises are critical for older Americans.
The Cost of Living Adjustment is announced in October of each year to alert seniors to the amount of extra money that will be coming in their upcoming checks. The COLA that’s announced in October will take effect for 2026 Social Security payments, so retirees need to watch the news carefully on the 15th to find out what their finances will look like next year.
Why is the COLA announced on October 15?
The 2026 Cost of Living Adjustment will be announced on the 15th because that is when the data used to calculate the adjustment will be available for the first time.
The COLA formula is set based on a specific measure of inflation. The benefits increase is equal to the average increase in the cost of a basket of goods and services as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The Bureau of Labor Statistics publishes this price index on a monthly basis. It lists the typical costs of a huge variety of different items, from groceries to medical care to housing and transportation. The Social Security Administration then measures the average year-over-year change in the index during the third quarter of the year — otherwise known as the months of July, August, and September — to determine how big the COLA will be for the coming year.
Since the September CPI-W data will be released on October 15, 2025, that is the date that all the data on rising prices will be in, so the COLA amount can be officially announced at that time. Boomers should look out for the announcement of their 2026 raise on that date and should begin preparing their budget adjustments once they know the amount of the raise coming their way.
A financial advisor can provide help in working with seniors to understand how this COLA affects their finances and to create a clear plan for how their Social Security benefits and retirement accounts can work together to cover the bills.
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