How the Government Shutdown Affects Social Security Cost-of-Living Announcements and What You Need to Know

The recent government shutdown has led to a delay in the Social Security Administration’s announcement regarding the cost-of-living adjustment (COLA) for 2026. This annual adjustment is based on inflation data and is crucial for 75 million recipients including seniors and disabled Americans.
Delayed Announcement Due to Government Shutdown
The announcement was initially scheduled for October 15, 2025, alongside the release of the September Consumer Price Index (CPI) data by the Labor Department. The CPI figures, a primary measure of inflation, are used to determine the COLA. However, the Bureau of Labor Statistics has postponed the CPI release to October 24, 2025. Consequently, the Social Security Administration plans to announce the 2026 COLA on the same day.
Impact on Social Security Benefits
Despite the delay, the new COLA will take effect on January 1, 2026. The Senior Citizens League estimates the COLA could be around 2.7%, up from the 2.5% increase in 2025. This adjustment would increase the average monthly payment for retired workers by $54, raising it from $2,008 to $2,062. However, the final rate will depend on the September CPI data.
Inflation Trends and Expectations
- Economists forecast the September CPI to rise to 3.1% annually, up from 2.9% in August.
- Inflation is influenced by tariffs on global imports, affecting goods like clothing, food, and toys.
- A rise in the breadth of inflationary pressures is noted, with 45% of CPI basket items showing price growth of 3% or more.
RBC economists Michael Reid and Carrie Freestone highlight these inflationary challenges as tariffs impact prices. If inflation continues to rise, some retirees may struggle to keep pace with increasing costs despite the COLA.
Future Inflation Projections
The Federal Reserve anticipates the Personal Consumption Expenditures price index to increase to 3.1% in 2025 before dropping to 2.6% in 2026. This projection underscores the importance of the COLA in helping retirees manage their expenses amidst fluctuating inflation rates.