The Social Security cost-of-living adjustment for next year will be announced Oct. 14. The current projection is 3.6%, higher than the 2.8% applied this year and the largest increase in three years. For the average retired worker, that works out to about $75 more per month. However, because Medicare Part B premiums are deducted from the check first, the amount recipients actually take home will not rise by as much as the projection. The increase will be reflected in payments starting in January.
If your household receives Social Security, mark next Wednesday on your calendar. On Oct. 14, the cost-of-living adjustment for next year will be announced.
The cost-of-living adjustment is a system that raises benefit amounts in step with rising prices. It is known as the COLA. Each year, on the day the September consumer price data is released, the Social Security Administration announces the following year's increase, and the higher amount arrives starting with the January payment.
Largest Increase in Three Years
The current projection is 3.6%. That is higher than the 2.8% applied this year and the largest increase since 2023. It reflects prices that did not ease as much as expected over the summer.
In dollar terms, it looks like this. The average retiree benefit is about $2,086 a month, and 3.6% would add roughly $75 a month. A surviving spouse receiving survivor benefits would see an increase of about $70, from an average of $1,933, and a disability beneficiary would see about $59 more, from $1,635. Over a year, that comes to a little over $900 for a retiree.
The calculation method is fixed. It uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), comparing the average of July, August and September with the same period a year earlier. That means the final number is not set until the September price data comes out, and every figure before then is a projection.
You Won't Take Home the Full Increase
The same story repeats every year. People look only at the increase percentage, get their hopes up, and are disappointed when they check their January deposit. That is because Medicare Part B premiums are automatically deducted from Social Security checks.
Next year's Part B premium has not yet been finalized. The Medicare trustees report projected $209.50 a month, which would be an increase of about $6.60 from $202.90 this year. However, because actual premiums have come in higher than projections in the past, some analysts think it could reach the $215 range. The official amount will be announced in November.
Put simply, even if your benefit rises by $75 a month, after subtracting the premium increase the amount you actually gain could be in the $60s. If your income exceeds a certain threshold and you pay an additional premium (IRMAA), the gap widens further.
What to Keep in Mind
The "Notice of Change in Benefits (COLA Notice)" that arrives by mail in December lists the exact amount you will receive next year and your deductions. It lets you see how much will be taken out for premiums and what your net payment will be, so it is best to keep it rather than throw it away. If you have an online account (my Social Security), you can view it in advance starting in mid-November.
If your address or bank account has changed, it is safest to update it now. When requests pile up at year-end, processing can be delayed and cause problems with your January deposit.
One more thing. During this period, calls and texts impersonating the Social Security Administration increase noticeably. They ask for your Social Security number or bank account, saying, "Identity verification is required to receive your increase." You do not need to apply for the cost-of-living adjustment, since it is applied automatically, so if you get such a call, simply hang up.