6 Changes to Social Security in 2026: What Retirees and Workers Need to Know
As of January 1, 2026, several important changes have taken effect that impact Social Security benefits. Some of these updates affect current retirees, while others impact future retirees and those still working.
Here’s a breakdown of the six biggest Social Security changes for 2026—and how they may affect your retirement plan.
1. 2026 Cost-of-Living Adjustment (COLA): 2.8%
Social Security benefits increased by 2.8% in 2026, slightly higher than last year’s 2.5% increase.
COLAs are automatically calculated each year based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) during the third quarter compared to the previous year. The percentage increase is rounded to the nearest one-tenth of 1%.
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What This Means:
The average single retiree will see about a $56 per month increase.
The average married couple’s combined benefit increases by about $88 per month, bringing average benefits to roughly $3,300 per month.
If you are already collecting Social Security, this increase was automatically reflected in your January 2026 payment. If you haven’t started benefits yet, the COLA will be factored into your future benefit.
Medicare Offset
Medicare Part B premiums increased from $185 in 2025 to $201.96 in 2026—a 9.6% increase. For some retirees, this higher Medicare premium may offset part of the COLA increase.
2. Earnings Test Limits Increased
If you collect Social Security before reaching your full retirement age (FRA) and continue working, your benefits may be temporarily reduced if your earnings exceed certain thresholds.
If You Are Under Full Retirement Age in 2026
Earnings limit: $24,480 per year ($2,040 per month)
Benefit reduction: $1 withheld for every $2 earned above the limit
In the Year You Reach Full Retirement Age
Earnings limit: $65,160 per year ($5,430 per month)
Benefit reduction: $1 withheld for every $3 earned above the limit
Once you reach full retirement age, there is no earnings limit.
There is also a special exemption in the year you retire. If you stop working mid-year, the earnings test may not apply the same way, even if your income earlier in the year exceeded the annual limit.
3. Higher Earnings Required for Social Security Credits
To qualify for Social Security retirement benefits, you must earn 40 credits over your lifetime (typically 10 years of work).
In 2026:
You earn one credit for each $1,890 of earnings per quarter
Maximum of 4 credits per year
This is up from $1,810 per quarter in 2025.
Earning more than 40 credits does not increase eligibility—but continuing to work and replacing lower-earning years with higher-earning years can increase your overall benefit.
4. Social Security Wage Cap Increased
Social Security payroll taxes apply only up to a maximum earnings level.
In 2026:
Wage cap increased to $184,500 (up from $176,100 in 2025)
Employees pay 6.2% up to this limit
Employers match 6.2%
Self-employed individuals pay 12.4%
Maximum Social Security tax per employee in 2026: $11,439.
There is no wage cap for Medicare taxes. Employees and employers each pay 1.45% on all wages. High earners also pay an additional 0.9% Medicare surtax above certain income thresholds.
5. Full Retirement Age (FRA) Changes Continue
The gradual increase in full retirement age—originally enacted in 1983—continues in 2026.
If born in 1959, your FRA is 66 and 10 months.
If born in 1960 or later, your FRA is 67.
This marks the final step in the scheduled increase from age 65 to 67.
You can still begin benefits as early as age 62, but your benefit will be permanently reduced. Delaying benefits beyond FRA increases your benefit by 8% per year up to age 70.
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6. Social Security Trust Fund Outlook
According to the most recent Trustees Report (June 2025), the Social Security Trust Fund is projected to be depleted in 2033.
If no legislative action is taken:
Only about 77% of scheduled benefits would be payable beginning in 2033
This implies a potential 23% reduction in benefits
Recent legislation expanding eligibility and tax changes affecting senior deductions may further strain the system. Updated projections are expected in the next Trustees Report.
While long-term funding concerns are real, historically Congress has acted to maintain program solvency. Future reforms could include tax adjustments, benefit formula changes, or age adjustments.
Final Thoughts
The 2026 Social Security changes affect:
Current retirees (COLA and Medicare adjustments)
Near-retirees (earnings limits and FRA timing)
Workers (wage cap and credit requirements)
Everyone (long-term solvency outlook)
Social Security remains a foundational component of most retirement plans—but it should not be your only source of income.
If you don’t yet have a comprehensive retirement plan, now is the time to build one. A coordinated plan should integrate Social Security, taxes, Medicare, retirement accounts, investments, insurance, and estate planning into one cohesive strategy.
Make sure you understand how these 2026 changes impact your specific situation before making claiming or retirement decisions.
Written by Ryan Morrissey CFP®, CLU®, CHFC®, CMFC
Founder & Principal Advisor of Morrissey Wealth Management
Host of the Retire with Ryan Podcast