Do you know which three months of the year decide your raise?
I did not, until I read the fine print on my own benefit letter. It is July, August, and September. Nothing else counts.
The government averages a price index across those three months. Then it compares that average with the same three months a year earlier.
The index is called CPI-W. It tracks prices paid by urban households that earn a paycheck, the way a working family shops.
The difference between the two summers becomes your cost-of-living adjustment, or COLA. It lands in the January check and stays put for twelve months.
Two of the three months are already on the books. July and August 2026 average 3.3% above last summer.
September’s number arrives on October 14, the same day the raise is announced. The 2027 raise is mostly written. One month to go.
Set that 3.3% next to the bills that matter at the kitchen table, measured over the year to August.
3.3%
Where the 2027 raise is tracking after July and August
2.1%
Groceries for the home, over the past year
5.0%
Home energy, gas and electric, over the past year
Groceries are running behind the raise. Home energy is running ahead of it.
That gap is the smaller problem. The calendar is bigger.
Prices reprice every month. The raise reprices once a year, from a window that closes in September.
A bill that jumps in October waits for the summer of 2027 to count. The raise that catches it arrives in January 2028.
So a September price is already four months old when the raise lands. By December 2027, it is fifteen months old.
Where the cohort’s money sits this quarter, and how far behind the raise runs in each aisle.
Plenty of retirees cover the lag the old way. Cash in reserve. A cushion for the months the check falls behind.
That cushion now earns real money. The Fed raised its target range to 3.75% to 4% in September, the first increase since 2023.
Retail money market funds held $3.11 trillion in early September. A money market fund is a pool of very short loans that pays close to the Fed’s rate.
The limit is that the cushion’s pay follows the Fed. If the Fed turns around, the cushion earns less in a matter of weeks.
The interest is taxed as ordinary income, too. A cushion is a bridge across the lag. It earns its keep only while the gap stays open.
The arithmetic
COLA method: the Social Security Administration sets the yearly cost-of-living adjustment from the average CPI-W for July, August, and September against the same quarter a year earlier, announced in October and paid from January. CPI-W (not seasonally adjusted), Bureau of Labor Statistics via FRED, series CWUR0000SA0: July 2026 327.104 and August 2026 328.481, average 327.793; July to September 2025 average 317.265. 327.793 / 317.265 = 1.033, about 3.3%, two months into the three-month window, Boomers Trade’s own arithmetic. Year over year to August 2026: food at home 2.1% (CUSR0000SAF11) and household energy 5.0% (CUUR0000SAH21), BLS via FRED. 2027 COLA announcement on October 14, 2026 with the September CPI: SSA schedule as reported by Gray News, August 26, 2026. The four- and fifteen-month lags count from the end of September 2026 to January 2027 and to December 2027 and are Boomers Trade’s own arithmetic; a price change after September 2026 enters the 2028 raise, paid from January 2028. Federal Reserve target range raised to 3.75% to 4.00% (3.75% to 4%) on September 16, 2026, the first increase since July 2023. Retail money market fund assets $3.11 trillion for the week ended September 2, 2026: Investment Company Institute.
Mark October 14 on the calendar by the phone. When the raise comes out, write it next to the two bills that matter most in your house. The gap between those numbers is the part of next year you will be paying for out of the cushion.
Andrew
Boomers Trade is written by someone getting older right alongside you, and watching who profits from it.
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