America’s Social Security system is adjusting to changing economic conditions, demographic trends and new legislation. The year 2026 will bring notable social security benefit changes that affect current retirees, people approaching retirement and workers who are still building eligibility. Below are five of the most consequential developments you should know about, along with ways to prepare.
1. Cost‑of‑Living Adjustment (COLA) increases by 2.8 percent
Social Security adjusts benefits each year to keep pace with inflation using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI‑W). The Social Security Administration (SSA) announced that social security benefit payments for 2026 will rise 2.8 percent, higher than the 2.5‑percent increase in 2025. This COLA applies to retirement benefits, survivor benefits, family benefits and Social Security Disability Insurance (SSDI) as well as Supplemental Security Income (SSI).
- Bigger monthly checks: The SSA estimates that the average retirement benefit will rise from $2,015 to $2,071 per monthssa.gov. For retired couples who both receive benefits, the average check will grow from about $3,120 to $3,208 per monthssa.gov. SSI recipients will see their federal payment standard increase to $994 per month for an individual and $1,491 per month for a couplessa.gov. The maximum retirement benefit for someone who has paid the maximum taxable earnings throughout their career and claims at full retirement age will increase to $4,152 per month, up from $4,018 in 2025ssa.gov.
- Why COLA matters: The adjustment is based on inflation data from the third quarter of 2024 compared with the same period in 2025ssa.gov. Although a larger COLA helps offset higher living costs, rising Medicare Part B premiums can eat into the increase. AARP reports that the standard Part B premium is projected to rise to about $206.50 per month in 2026, roughly 11.6 percent higher than in 2025aarp.org; final figures will be announced later. Because most Medicare premiums are deducted from Social Security checks, retirees should expect the net benefit increase to be smaller than the full COLA.
2. Full retirement age reaches 67 for people born in 1960 or later to take effect as part of social security benefit changes
The 1983 amendments to the Social Security Act gradually raised the full retirement age (FRA) — the age at which workers can claim 100 percent of their earned benefit — from 65 to 67. People born in 1958 and 1959 already face FRAs of 66 years and 8 months and 66 years and 10 months, respectively. Beginning in November 2026, workers born in 1960 or later reach an FRA of 67. This final step in the phase‑in marks the end of the four‑decade effort to reflect longer life expectancies and shore up the trust fund.
- Early or delayed claiming remains optional: You can still claim benefits as early as age 62, but doing so permanently reduces your monthly benefit. For example, someone born in 1960 who claims at 62 will receive about 30 percent less than if they waited until 67ssa.gov. Conversely, delaying benefits beyond the FRA earns delayed retirement credits of roughly 8 percent per year up to age 70.
- Planning ahead: Workers nearing the FRA should decide when to claim based on health, longevity expectations, work plans and financial resources. Reaching the FRA also eliminates the earnings test, meaning you can work and receive benefits without any withholding after the month you attain 67.
3. Higher wage cap means high‑income workers will pay more as part of social security benefit changes
Social Security is funded largely through a 12.4‑percent payroll tax (split 6.2 percent each between employee and employer) on wages up to a maximum taxable earnings cap. The SSA indexes that cap to national wage growth each year. In 2026, the wage cap rises to $184,500, up from $176,100 in 2025. Earnings above this threshold are not subject to Social Security tax, though they remain subject to Medicare taxes.ssa.gov
- Impact on workers: Employees will pay 6.2 percent on income up to $184,500, for a maximum Social Security tax of about $11,439 (6.2 % × $184,500). Self‑employed individuals pay both the employee and employer portions, for a total of 12.4 percent, meaning their maximum Social Security tax could reach $22,878. High‑income workers should plan for the increased withholding, while those earning above the cap will continue to pay Medicare tax on all earnings, plus an extra 0.9 percent Medicare surtax on earned income above $200,000 ($250,000 for married couples).
- Why it matters: Raising the taxable maximum brings more revenue into Social Security. It also slightly increases the maximum potential benefit for high earners who pay more into the system. However, this change primarily affects upper‑income workers; most Americans earn below the wage cap and will not see a change in withholding.
4. A new $6,000 deduction for seniors (but Social Security benefits still may be taxed) as part of social security benefit changes for 2026.
The 2025 tax law, commonly referred to as the One Big Beautiful Bill Act, created a new additional standard deduction for individuals age 65 or older. Beginning with tax year 2025 (returns filed in early 2026) through 2028, seniors can claim an extra $6,000 deduction per person, or $12,000 for a married couple where both spouses qualifyirs.gov. This deduction is in addition to the existing higher standard deduction for seniors. It phases out for single filers with modified adjusted gross income (MAGI) above $75,000 and for joint filers with MAGI above $150,000irs.gov.
- Reducing taxable income: The enhanced deduction can significantly reduce taxable income for middle‑income retirees. The House Ways and Means Committee notes that nearly 90 percent of seniors may see little or no federal income tax on their Social Security benefits because of this deductionwaysandmeans.house.gov. However, tax professionals caution that the 2025 Act did not change how Social Security benefits are taxed. Thomson Reuters explains that the deduction is a below‑the‑line adjustment that does not reduce “provisional income,” the measure used to determine how much of your benefits are taxabletax.thomsonreuters.com. Seniors may still owe taxes on up to 50 percent or 85 percent of their benefits if their provisional income exceeds $25,000 (single) or $32,000 (married)tax.thomsonreuters.com.
- Planning tip: While many seniors will benefit from the deduction, it doesn’t make Social Security income automatically tax‑free as part of the social security benefit changes. Retirees contemplating Roth conversions or large retirement‑account withdrawals should consider how additional income could increase the taxable portion of their Social Security benefits.
5. Updated earnings thresholds, credits and disability amounts as part of social security benefit changes coming in 2026
Several key thresholds used to calculate social security benefits and eligibility will change in 2026:
| Change | 2025 Level | 2026 Level | Why it matters |
|---|---|---|---|
| Earnings test – under full retirement age | $23,400 per year ($1,950/mo) | $24,480 per year ($2,040/mo)ssa.gov | If you work and collect benefits before your FRA, Social Security will withhold $1 in benefits for every $2 you earn above the limit. The higher threshold lets you earn $1,080 more without deductions. |
| Earnings test – year you reach FRA | $62,160 per year ($5,180/mo) | $65,160 per year ($5,430/mo)ssa.gov | In the months before you reach full retirement age, you lose $1 for every $3 earned above this limit. The higher cap lets near‑retirees earn more without reductions. |
| Quarter of coverage (Social Security credit) | $1,810 in earnings to earn one credit | $1,890 per creditssa.gov | Workers must accumulate 40 credits (four per year) to qualify for retirement benefits. You’ll need $7,560 of earnings in 2026 to max out four credits. |
| Substantial gainful activity (disability) | $1,620/mo (non‑blind) and $2,700/mo (blind) | $1,690/mo (non‑blind) and $2,830/mo (blind)ssa.gov | Disabled workers can earn up to these amounts without losing SSDI eligibility. The trial work period threshold also increases to $1,210/mossa.gov. |
| SSI federal payment standard | $967/mo (individual); $1,450/mo (couple) | $994/mo (individual); $1,491/mo (couple)ssa.gov | People receiving SSI due to age or disability will see their monthly benefits rise. |
These adjustments ensure that Social Security Benefits keeps pace with wage growth and inflation. They also allow working beneficiaries to earn more before facing benefit reductions. Keep in mind that any benefits withheld under the earnings test are not lost; when you reach full retirement age, the SSA recalculates your payment to credit you for the months benefits were withheld.
Final thoughts
Social Security remains a vital part of retirement income for millions of Americans. The 2026 social security benefit changes – a moderate 2.8‑percent COLA, the final rise in the full retirement age to 67, a higher wage cap, a new senior tax deduction and updated earnings and eligibility thresholds – are designed to reflect inflation and demographic realities. Understanding these developments can help retirees and workers make informed decisions about claiming benefits, working in retirement and tax planning. As always, consult the Social Security Administration’s resources or request a review with a retirement planner for guidance specific to your situation.