Yes, a Cost-of-Living Adjustment (COLA) results in a permanent increase to your monthly payment, not a one-time payment. It is an annual adjustment applied to Social Security, SSI, and federal pensions (starting in January) to help benefits keep up with inflation, typically announced in October.
When is the cost-of-living adjustment (COLA) paid? If a COLA is payable, we make the change in December of each year. You'll receive the adjusted payment in January, the following month.
No. COLAs are not one-time payments.
COLA is often seen as an income boost for those receiving Social Security, but it's important to understand how it can impact your benefits —even before you retire. Every October, the Social Security Administration announces the cost-of-living adjustment (COLA) for the upcoming year.
To get the full COLA, a retiree or survivor annuitant must have been in receipt of payment for a full year. If not, the increase is prorated under both plans. Prorated accounts receive one-twelfth of the increase for each month they received benefits. Cost-of-Living Adjustments were first prorated in April 1982.
Cost-of-Living Adjustments are effective each December first. The adjustment appears in your payment on the first business day of January, which is when your benefit for December is paid.
The 2026 cost-of-living adjustment (COLA) is slightly higher than last year's 2.5 percent increase, reflecting a recent uptick in inflation. The 2.8 percent COLA will boost the average monthly benefit for a retired worker by about $56, from $2,015 to $2,071, according to SSA estimates.
October is when the Social Security Administration (SSA) typically announces each year's cost-of-living adjustment (COLA). The purpose of Social Security COLAs is to help ensure that benefits are able to keep up with inflation.
Unless it's required by law, each company can decide whether to offer this benefit and how much to change salaries for COLA. In 2023, 80% of employers planned to provide base pay increases to cover inflation. Employers must offer a cost-of-living salary adjustment for every employee.
In salary, COLA stands for Cost-of-Living Adjustment, an increase in pay or benefits to help maintain purchasing power against inflation, often tied to the Consumer Price Index (CPI), and is common for government benefits (like Social Security) and some union/pension plans, but optional for private employers, differing from performance-based raises.
Social Security benefits are paid a month behind, meaning the payment you receive in one month is for the previous month's benefits (e.g., May's benefit is paid in June). Payments arrive on the second, third, or fourth Wednesday of the month, depending on your birth date, with earlier payments going to those born earlier in the month.
Social Security benefits got a raise of 2.8% for 2026, which started with payments in January 2026 (and December 31, 2025, for some SSI recipients), thanks to the annual Cost-of-Living Adjustment (COLA) determined by inflation. This increase adds about $56 to the average retired worker's monthly check, but some of this boost is offset by rising Medicare Part B premiums.
If you receive both Social Security benefits and SSI, your Social Security benefit will arrive on the third of the month and your SSI payment will arrive on the first of the month. When you applied for Social Security benefits, you should have signed up to receive your payments electronically.
Extra benefits coming your way
For example, many companies pay annual bonuses in March. So if you retire after generating just a few months of income, you may be able to stay in a lower tax bracket for the year, depending on your other income.
A raise is typically merit-based and reflects an employee's performance or contribution to the company. On the other hand, a cost of living adjustment (COLA) is an increase in an employee's salary or hourly wage designed to keep their spending power consistent with inflation or other economic factors.
For 2025, the Social Security Cost-of-Living Adjustment (COLA) was a 2.5% increase, meaning most beneficiaries received about $50 more per month to help offset inflation, though it was considered a modest rise compared to recent years, impacting retirees and those on fixed incomes as prices remained high. This adjustment was based on the Consumer Price Index from 2023 to 2024 and applied to Social Security and Supplemental Security Income (SSI) payments starting in January 2025, with specific changes to maximum taxable earnings and earnings limits also taking effect.
A Cost-of-Living Adjustment (COLA) is a permanent annual increase to your pension to help offset the impact of inflation. Once you are eligible, you automatically receive a COLA increase each September.
Congress enacted the COLA provision as part of the 1972 Social Security Amendments, and automatic annual COLAs began in 1975. Before that, benefits were increased only when Congress enacted special legislation. Beginning in 1975, Social Security started automatic annual cost-of-living allowances.
A cost of living adjustment (COLA) is a change in one's monthly retirement benefit to account for increasing prices. COLAs help to ensure that your purchasing power remains the same no matter how long you may live, and how quickly prices might rise.
Requirements to Receive the COLA Bank
Only those retirees (or continuing survivors) whose benefits commenced on July 1 and continued for one full Fiscal Year will receive COLA Bank, if any. For example, the July 1, 2025 COLA bank is 0.3% for a July 1, 2024 retirement date.
The COLA was 2.5 percent in 2025. Nearly 71 million Social Security beneficiaries will see a 2.8 percent COLA beginning in January 2026. Increased payments to nearly 7.5 million people receiving SSI will begin on December 31, 2025.
Social Security COLAs are automatic and begin in January. The Consumer Price Index for Urban Wage Earners and Clerical Workers tracks inflation and determines the annual COLA rate. Everyone receiving SSDI or SSI benefits gets the COLA.