Seniors Will Get a 2026 Raise
The lone government report of Shutdown 2025 was released to great fanfare, but don’t get used to it. When the Bureau of Labor Statistics (BLS) announced the September Consumer Price Index (CPI), which was originally scheduled to be released on Oct 15, it also said that “no other releases will be rescheduled or produced until the resumption of regular government services.”
The September report showed that the annual inflation rate ticked up to 3 percent, primarily due to a 4.1 percent monthly increase in the gas index. The results were slightly better than expected but tariff related categories like apparel, furniture, bedding, household furnishings and supplies, and floor coverings are seeing prices start to accelerate.
BLS workers were called back to compile this data amid the shutdown to ensure the report was released before the month's end mostly for those who rely on Social Security. Each year, the Social Security Administration (SSA) uses consumer inflation data to calculate the cost-of-living adjustment (COLA) for Social Security (SS) recipients. With this report, the SSA announced that payments for 75 million Americans who receive benefits will increase 2.8 percent in 2026.
Over the last decade the COLA increase has averaged about 3.1 percent. The COLA was 2.5 percent in 2025. The 2026 bump means that on average, Social Security retirement benefits will increase by about $56 per month starting in January. That may not seem like a lot, but every bit helps, especially for those Americans who are living on a fixed income.
There was another notable data point that came from the September CPI report: an adjustment to the SS Earnings Test, which applies to recipients who claim benefits BEFORE their full retirement age (age 67 for those born in or after 1960) and continue to work. The rule states that if you are under full retirement age for the entire year, the Social Security Administration deducts $1 from your benefit payments for every $2 you earn above the annual limit. For 2026, that limit is $23,480. In the year you reach full retirement age, it’s a deduction of $1 in benefits for every $3 you earn above a different limit. In 2026, this limit on your earnings is $65,160. (SSA only counts earnings up to the month before you reach your full retirement age, not your earnings for the entire year.)
The SS earnings test and annual COLA underscore why it usually makes sense to wait to claim your Social Security benefit to at least your Full Retirement Age (66-67, depending on the year of your birth) or to age 70, when you can receive credits for delaying filing that can boost retirement savings significantly. The higher the Social Security benefit, the more money that you can collect every year when the COLA is announced.