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Social Security COLA

September 25, 2023


The Social Security Cost-of-Living Adjustment is a vital component for retirees which helps to ensure their benefit can keep pace (or at least help to keep pace) with inflation over their retirement years.

Last year saw the largest COLA increase in 41 years, coming in at 8.7%. With that increase fresh in mind and with all of us still feeling the impact of inflation, some may think – or hope – for a similarly high increase this year…and as such, will likely be in for a disappointment.

Where is inflation now?


Inflation is currently at 3.7%, down from its June 2022 high of 9%, but up from its June 2023 low of 3%.

How is the Social Security COLA Calculated?

Before 1975, COLA increases were determined by legislation. Since 1975, the COLA has been set according to the Consumer Price Index for Urban Wage Earners and Clerical Workers (“CPI-W”), a value calculated on a monthly basis by the Bureau of Labor Statistics.

Per the Social Security Administration:

“A COLA effective for December of the current year is equal to the percentage increase (if any) in the CPI-W from the average for the third quarter of the current year to the average for the third quarter of the last year in which a COLA became effective.”

For example, the COLA increase for 2023 was based on the average of the CPI-W numbers for July, August, and September 2022 divided by the average of CPI-W numbers for July, August, and September 2021:


















291.901 / 268.421 = 1.08747, or an 8.7% increase.

It’s important to note that Social Security will never apply a negative COLA - the lowest COLA applied will always be 0% (as it did in 2009, 2010, and 2015).

Where do we stand?

Looking at the data for the most recent available months puts the expected COLA around 3% - significantly lower than what we saw last year but still above the average over the past 15 years (which has been around 2.5%).

This estimate is in line with estimates reported by AARP (3%) and the Senior Citizens League (3.2%).

When will we know? 

The September 2023 CPI-W is set to be released on October 12th. Mark your calendars!



The Senior Citizens League. (2023, September 13). Cola estimate for 2024 is 3.2%. The Senior Citizens League.

Markowitz, A. (2023, September 13). Social Security Cola 2024: How much will benefits increase next year?. AARP.

Social Security. (2023, September 25). Latest Cost-of-Living Adjustment. Social Security Administration.