An important adjustment in the social security system in the U.S. is being delayed due to the current government shutdown. The ongoing government shutdown is delaying the announcement of the annual Social Security cost-of-living adjustment for tens of millions of beneficiaries.
Originally scheduled for Wednesday, the 2024 Social Security COLA announcement will now be Oct. 24. It is timed to the September Consumer Price Index, which also has not yet been released.
The U.S. Social Security Cost-of-Living Adjustment (COLA) is an annual increase in benefits designed to keep pace with inflation. It is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), measured during the third quarter of each year. If the index rises, benefits increase accordingly; if not, no COLA is issued.
For 2025, the Social Security COLA is set at 2.5%, meaning beneficiaries will see an average monthly increase of about $50 starting in January 2025. This adjustment helps protect retirees’ and disability recipients’ purchasing power as prices rise. COLA changes are announced each October by the Social Security Administration.
Projections for 2026 suggest a similar adjustment in the range of 2.5%–2.7%, though that will depend on inflation trends. COLA is a critical tool in maintaining the financial stability of millions of Americans who rely on Social Security for a significant portion of their income.
The annual COLA is based on inflation data—specifically the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)—released by the Bureau of Labor Statistics (BLS). If the shutdown leads to BLS staff furloughs, the September CPI data may be delayed, preventing the Social Security Administration from calculating and announcing the COLA on time, typically mid-October.
Sue Conard, a 75-year-old retired nurse from La Crosse, Wisconsin, and SSA recipient, recently traveled to the U.S. Capitol with other retiree members of the American Federation of State, County and Municipal Employees union to lobby for meaningful progress towards gaining health care protections to end the shutdown, as well as changes to Social Security benefits.
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“The issue of how the COLA is determined is flat-out wrong because health care is not factored into the CPI,” said Conard, speaking on the front steps of the Longworth House Office Building.
Some lawmakers have proposed legislation that would make SSA use a different index, called the Consumer Price Index for the Elderly (CPI-E), to calculate the cost-of-living increase that measures price changes based on the spending patterns of older people on things such as healthcare, food and medicine.
While the delay may be temporary, it creates uncertainty for tens of millions of retirees and disability recipients who depend on Social Security benefits to keep up with rising costs. The situation also reignites debate over how the COLA is calculated, with growing calls to adopt a more accurate index, like the Consumer Price Index for the Elderly (CPI-E), that better reflects seniors’ real expenses, especially in health care.