How is the Social Security COLA calculated?
The Social Security Administration calculates the cost-of-living adjustment (COLA) applied to benefits each year by comparing the consumer price index for urban wage earners and office workers for Quarter 3 (July, August, September) from the current year to the previous one. .
CPI-W data for July and August is available and the current average is 291. The average for the third quarter of last year was 268,421. That means if the COLA were determined by the July and August numbers, seniors would see an 8.4 percent increase in their payments. However, if the price increases in September were not as significant as those observed at the beginning of the summer, this figure could be reduced.