More than 70 million Americans will see changes to their Social Security benefits starting in 2026, including a cost-of-living adjustment, higher income thresholds, and new tax limits. The Social Security Administration (SSA) announced the updates this month, citing inflation adjustments and the final phase-in of key retirement age rules.
Here are the six most important things to know about what’s changing next year.
1. Benefits Will Rise 2.8% With the 2026 COLA
Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 2.8% cost-of-living adjustment (COLA) beginning January 2026.
That translates to an average increase of about $56 per month, lifting the average retired worker’s benefit from roughly $2,015 to $2,071, according to the SSA.
The adjustment is intended to offset inflation and ensures that benefits maintain purchasing power. SSI payments will increase beginning December 31, 2025, with the federal payment standard for individuals rising to $994 per month.
2. More Income Will Be Taxed for Social Security
The maximum taxable earnings limit — the amount of income subject to Social Security payroll taxes — will rise to $184,500 in 2026, up from $168,600 in 2025.
That means high earners and their employers will pay Social Security tax (6.2% each) on a larger portion of their wages. The change is expected to boost revenue for the Social Security trust funds, which remain under long-term financial strain.
3. Full Retirement Age Officially Reaches 67
For workers born in 1960 or later, the full retirement age (FRA) — the age to receive 100% of one’s benefits — is now 67.
This marks the final step in a decades-long transition enacted by Congress in 1983. Retirees who claim benefits before FRA will still face reductions of up to 30%, while those who delay beyond FRA can earn delayed retirement credits, increasing their benefit by up to 8% per year until age 70.
4. Working While Collecting? Earnings Limits Are Rising
If you collect benefits before reaching FRA and continue to work, there’s a cap on how much you can earn before some benefits are temporarily withheld.
In 2026, that annual limit increases to $24,480 for those under FRA all year (up from $22,320). For those who reach FRA during 2026, the limit rises to $65,160. Beyond these thresholds, $1 in benefits is withheld for every $2 or $3 earned over the limits, depending on your age.
5. Work Credit Requirements and Maximum Benefits Increase
To qualify for Social Security, you earn “credits” based on annual earnings. In 2026, one credit will require $1,890 in earnings, up from $1,730 in 2025. You still need 40 credits (about 10 years of work) to qualify for retirement benefits.
Meanwhile, the maximum monthly benefit at full retirement age is set to increase again, rising from $4,018 in 2025 to a higher level (to be finalized by SSA in December) reflecting inflation and wage growth.
6. Solvency Questions Still Loom Over the Program
Even with higher taxes and a modest COLA, the Social Security trust funds continue to face long-term solvency challenges.
Current projections show the Old-Age and Survivors Insurance (OASI) Trust Fund could be depleted around 2033–2034 without legislative action.
Congress is expected to debate potential solutions in the coming years — such as higher payroll taxes, benefit adjustments, or new funding mechanisms — to ensure benefits remain sustainable for future retirees.
Bottom Line
The 2026 adjustments are largely positive for retirees and workers, delivering modest benefit increases and expanded earnings limits. But they also highlight a program under fiscal strain — and the need for Americans to plan carefully for retirement as Social Security’s future evolves.
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