Social Security in the US will undergo changes next year that will affect retirees and active workers, according to data provided by the Social Security Administration. Among the changes to be introduced, it is worth highlighting the COLA increase, based on information from the Bureau of Labor Statistics. On the other hand, a study by the Nationwide Retirement Institute revealed that part of the population is unaware of the changes taking place. Read on to learn more.
1. Benefits will increase due to the cost-of-living adjustment (COLA)
Each year, Social Security payments are adjusted to compensate for the increase in the cost of living, based on the Consumer Price Index.
For 2026, the Social Security Board of Trustees estimates an increase of 2.7%, slightly higher than the 2.5% adjustment applied in 2025. This increase would take effect in January 2026 and seeks to protect the purchasing power of more than 70 million beneficiaries.
The final figure will be officially announced after the release of the September inflation report by the Bureau of Labor Statistics on October 15.
2. Beneficiaries will be able to earn more money without losing benefits.
Currently, those who receive Social Security benefits before reaching their full retirement age (FRA) may have part of their pension withheld if their income exceeds certain limits.
In 2025, the lower limit is $23,400 and the upper limit is $62,160. By 2026, these limits are expected to increase to $24,360 and $64,800, respectively, allowing beneficiaries to work and earn a little more before their payments are withheld. Once FRA is reached, these withholdings no longer apply.
3. High-income workers will pay more Social Security taxes
Social Security is primarily funded by a 6.2% payroll tax applied up to a certain wage cap. In 2025, that cap is $176,100, so any income above that amount is not taxed for Social Security.
However, trustees project that the wage cap will increase to $183,600 in 2026. This means that an additional $7,500 would be subject to the tax, representing about $465 more in contributions for high-wage workers.
These changes will be officially announced by the Social Security Administration on October 15 and are part of the annual adjustment to maintain the sustainability of the system in the face of economic changes.
Social Security 2026 COLA increase is expected
Social Security 2026 COLA increase is expected, and this will affect millions of Americans. Each year, Social Security benefits receive a cost-of-living adjustment (COLA) to help beneficiaries keep up with inflation. The Social Security Administration will not officially announce the 2026 COLA until October 2025, but estimates are already being made based on inflation trends.
Apart from COLA, several other changes to Social Security are planned in 2026. These include updates to the full retirement age, taxable earnings limit, benefit earnings test, Medicare premiums, and administrative rules under executive orders.
Full retirement age changes in 2026
Full retirement age (FRA) marks when recipients can collect 100% of their Social Security benefits. Starting in November 2025, FRA will rise to 66 years and 10 months for people born in 1959. In January 2026, FRA will reach 67 for individuals born in or after 1960, completing the phase-in of the retirement age increase from 65 to 67. People born on January 1 should follow the previous year’s age rule.
Social Security tax and wage base updates
The Social Security taxable wage base is projected to increase. According to the 2025 Social Security Board of Trustees Report, the maximum taxable earnings for 2026 will be $183,600. This represents an increase of $7,500 from 2025. The official taxable wage base will be confirmed in October 2025 alongside the COLA announcement. Higher earners will therefore pay more into the Social Security system.
Social Security Earnings test and benefit reductions
The Social Security earnings test limits the amount beneficiaries can earn while collecting payments before reaching full retirement age. For people below FRA in 2026, the annual earnings limit is projected at $24,360. Benefits will be reduced by $1 for every $2 earned above this amount. For those reaching FRA in 2026, the limit will be $64,800, with $1 deducted for every $3 earned above the cap until FRA is reached.
