CPI Delay Means Federal Retirees Wait For 2026 COLA Computation
A government shutdown that has halted most federal data releases has now delayed the report for calculating the 2026 cost-of-living adjustment (COLA) for Social Security and federal retirement benefits.
The September Consumer Price Index (CPI) — the final component required to determine next year’s COLA — was anticipated to be indefinitely postponed during the shutdown.
However, a Bureau of Labor Statistics (BLS) spokesperson has subsequently confirmed that the data will now be published on October 24. The Trump administration is recalling some furloughed workers in order to provide the Consumer Price Index data in time for the Social Security COLA information to be release by November 1st.
No other reports will be issued during the government shutdown.
This date is later than usual and, in conjunction with layoffs and the shutdown of government offices, may create problems for the Social Security Administration (SSA) and the Office of Personnel Management (OPM) to finalize COLA calculations. The SSA typically announces the COLA in mid-October.
How COLA Calculation Works
Here is how the COLA calculation works:
- CPI-W readings are taken from the third quarter (July – September).
- These data are compared to the average CPI-W reading from the previous year’s third quarter.
- The average reading from the current year’s third quarter (2025) is compared to the figure from the third quarter of 2024.
- If the average CPI-W reading increases in 2025, then the difference, rounded to the nearest 0.1%, represents the increase in benefits that beneficiaries will receive in 2026.
- If the figure is lower— indicating deflation—no adjustment is made. That happened several times under the Obama administration. Deflation has not occurred in 2026 so it is highly unlikely this will occur for the 2026 COLA.
The process for calculating the COLA will not change. The change will occur when those impacted learn the final 2026 COLA calculation, which will take effect in January 2026.
The latest report from the Senior Citizens League predicted the 2026 COLA would be 2.7%. If that number turns out to be the final one, it would be higher than the 2025 COLA that was 2.5%. Over the last 20 years, the COLA has averaged 2.6%.
Annual COLA and Annual Average GS Pay Raise
Over time, the annual COLA makes a big difference in the amount of income for retirees. This chart displays the annual COLA increase for each of the last 10 years. The 2022 increase (payments started with the higher rate in January 2023) was an anomaly, reflecting the highest increase due to raging inflation that was the highest since the Carter administration.
| Year | COLA (%) | Average GS Pay Raise (%) |
|---|---|---|
| 2016 | 0.0 | 1.0 |
| 2017 | 0.3 | 1.0 |
| 2018 | 2.0 | 1.4 |
| 2019 | 2.8 | 1.4 |
| 2020 | 1.6 | 2.6 |
| 2021 | 1.3 | 1.0 |
| 2022 | 5.9 | 2.2 |
| 2023 | 8.7 | 4.1 |
| 2024 | 3.2 | 4.7 |
| 2025 | 2.5 | 2.0 |
Significance of the Delay
The COLA for federal retirees and Social Security recipients is based on the average increase in the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) during the third quarter (July, August, and September) compared with the same period a year earlier.
The September CPI release completes that calculation. Without it, the COLA cannot be computed or announced — consequently, millions of Americans, including Social Security beneficiaries and retired federal employees, will wait until later for calculating their monthly income increase in 2026.
Although the COLA will still take effect in January, the time constraints create administrative and financial uncertainty for both agencies and retirees alike.
Impact on Federal Retirees
Federal retirees under the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) rely on the same inflation data used to determine the Social Security COLA. The Office of Personnel Management (OPM) typically adopts the same percentage increase for CSRS annuitants, while FERS retirees receive a reduced COLA when inflation exceeds 2%, typically one percentage point less than the full amount.
A delayed CPI release pushes OPM’s timeline back, forcing payroll systems and retiree services to process updates within a compressed window before January payments.
For retirees planning withdrawals or tax withholding for early 2026, the uncertainty complicates financial planning. Additionally, for those approaching retirement, the lack of a confirmed COLA makes it challenging to model annuity income.
Impact on Social Security Recipients
- Budget Uncertainty: Social Security beneficiaries utilize the October COLA announcement to plan their expenses for the upcoming year. A delay in the announcement leaves millions uncertain about their 2026 income.
- Processing Risk: The Social Security Administration (SSA) will have limited time to finalize the increase once the Consumer Price Index (CPI) data are released. A compressed schedule increases the risk of delays or errors in benefit adjustments.
- Medicare Interplay: The annual Medicare Part B premium increase is announced concurrently with the Social Security COLA. Delays in one announcement can complicate the other.
Impact on Current Federal Employees
While the COLA affects federal retirees, the delay also has repercussions for the active federal workforce:
- Employees nearing retirement may postpone final retirement decisions until they know the updated COLA amount, as this will determine their retirement income for the coming year.
- Human Resources and payroll offices must adjust any transition and benefits communications with employees until later in the year, as they will not have the final figures in hand until later this year.
- The delay, in conjunction with the shutdown’s broader disruptions, contributes to uncertainty regarding government operations and future pay adjustments.
Conclusion
The Bureau of Labor Statistics’ decision to release the September Consumer Price Index (CPI) on October 24th should enable the announcement of the 2026 Cost-of-Living Adjustment (COLA) before the end of the month, albeit slightly later than usual. Nevertheless, this incident underscores the critical dependence of federal benefits on timely economic data and the far-reaching impact of even brief shutdowns on payroll systems and retirement planning.
For both retirees and federal employees, patience will be necessary this month. However, the adjustment, once finalized, will still take effect with payments in January 2026.
Key Dates
- October 24, 2025: BLS releases September CPI data
- Late October: Social Security Administration (SSA) announces the 2026 COLA
- January 2026: COLA increase takes effect for Social Security and federal retirement checks
