Additional Coverage:
- 6 Social Security Changes Coming in 2026 That Impact Everyone (financebuzz.com)
6 Key Social Security Changes Coming in 2026
Several significant changes to Social Security are on the horizon for 2026, impacting benefits, taxes, and eligibility. Understanding these adjustments is crucial for both current and future beneficiaries.
1. Projected COLA of 2.7%: The cost-of-living adjustment (COLA) for 2026 is projected to be 2.7%.
While this is slightly higher than the 2.5% COLA in 2025, it may not fully offset rising living costs. Based on the average Social Security benefit of $2,006.69 in July 2025, this translates to an average monthly increase of just $54.18.
2. Higher Social Security Tax Limit: The maximum amount of earnings subject to Social Security taxes will increase in 2026. Estimated to reach $183,600, up from $176,100 in 2025, this change will affect higher earners who will pay Social Security taxes on a larger portion of their income.
3. Full Retirement Age Increase: Individuals born in 1960 will reach full retirement age (FRA) at 67.
Claiming benefits before FRA will result in permanently reduced monthly payments. This change reflects increasing life expectancies.
4. Tax Deduction for Some Retirees: The One Big Beautiful Bill, effective for the 2025 tax year (filed in 2026), introduces a deduction for retirees aged 65 and older.
This deduction, $6,000 for single filers and $12,000 for joint filers, aims to reduce the tax burden on Social Security benefits for lower and middle-income retirees. The deduction phases out for higher incomes.
5. Higher Earnings Limit for Beneficiaries: Those claiming Social Security before FRA are subject to an earnings test, which limits how much they can earn without impacting benefits.
This limit will increase in 2026, allowing beneficiaries to earn more. The annual limit rises to $24,360 for those under FRA, and $64,800 for those reaching FRA in 2026.
6. Increased Earnings Needed for Social Security Credits: Earning 40 work credits is essential for Social Security eligibility.
The amount of earnings needed to earn one credit will increase again in 2026. This could impact part-time and lower-income workers.
Looking Ahead: These changes underscore the ongoing evolution of Social Security. Staying informed about these adjustments is vital for planning your retirement and ensuring long-term financial security.
Read More About This Story:
- 6 Social Security Changes Coming in 2026 That Impact Everyone (financebuzz.com)