Social Security is a financial lifeline for close to 70 million people across the U.S. It supports not only retirees but also individuals with disabilities, surviving family members, and dependent children. A Gallup poll from April 2025 found that 86% of retirees rely on their Social Security benefits to manage at least part of their everyday expenses.
Because so many people count on Social Security, even minor adjustments to the program can have far-reaching effects. While the full picture won’t be clear until later this year, there are several important changes expected to take place in 2026.
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A Modest COLA Could Mean a Slight Increase in Benefits
One of the most closely watched changes to Social Security each year is the Cost-of-Living Adjustment, or COLA. It’s designed to help benefits keep up with rising prices. Early estimates from The Senior Citizens League suggest that the COLA for 2026 could be around 2.6%.
Now that the average monthly benefit for retired workers has crossed the $2,000 mark, a 2.6% increase would add about $52 per month for many. Still, the inflation gauge used to calculate this, known as the CPI-W, doesn’t always reflect the actual spending patterns of older adults, particularly when it comes to medical costs and housing. So even with a bump in benefits, it may still fall short of covering what many seniors truly need.
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High Earners Will Likely Pay More Into the System
In 2025, only wages up to $176,000 are subject to the 12.4% payroll tax that supports Social Security. This earnings cap is set to increase in 2026, which means higher earners will contribute more.
Most workers won’t notice any change, but the top 6% of income earners will see a larger portion of their paycheck taxed. The limit is tied to the National Average Wage Index, so as average wages rise nationwide, the cap rises too.
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The Maximum Benefit at Full Retirement Age Will Increase
For workers who’ve consistently earned high incomes over a 35-year career, the top Social Security benefit at full retirement age is projected to exceed the 2025 maximum of $4,018 per month.
To receive this highest possible amount, a person must:
• Have worked for at least 35 years,
• Earned the maximum taxable wage or more each of those years,
• And waited until reaching full retirement age to begin collecting benefits.
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Fewer Seniors May Owe Taxes on Their Benefits
While Social Security benefits still aren’t fully tax-free, a new federal deduction is set to provide some relief. Beginning with the 2025 tax year (filed in 2026), adults aged 65 and older could qualify for a $6,000 deduction or $12,000 if married and filing jointly, under a recent change in federal tax law.
That said, the deduction starts to phase out for individuals making over $75,000 and couples earning more than $150,000. It disappears entirely for those with incomes above $175,000 (single filers) or $250,000 (joint filers).
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Early Filers Will Be Able to Earn More Without Penalties
If you start receiving Social Security before reaching full retirement age and continue to work, some of your benefits may be withheld if your earnings go over a set limit. For 2025, that earnings limit is $23,400. It’s expected to increase in 2026, giving early filers a bit more room to earn without having benefits reduced.
For those who reach full retirement age in 2026, the higher earnings threshold, currently $62,160, is also likely to rise. It’s important to note that any benefits withheld due to excess earnings aren’t gone for good. The SSA adjusts future payments to make up for what was held back.
- Disability Income Limits Will Increase
Social Security Disability Insurance (SSDI) recipients will see updated income limits in 2025. Non-blind individuals can earn up to $1,620 per month, while those who are blind can earn up to $2,700 without affecting their benefits. These thresholds are expected to rise again in 2026, giving disabled workers a bit more leeway to earn extra income while still keeping their SSDI benefits.
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Earning Work Credits Will Get Slightly Harder
To become eligible for Social Security benefits, most individuals need to earn 40 work credits, roughly equal to 10 years of employment. In 2025, you earn one credit for every $1,810 in income. Because this figure is tied to average wage growth, the amount needed to earn credits is expected to increase slightly in 2026.
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West Virginia Will End State Tax on Benefits
Beginning in 2026, West Virginia will stop taxing Social Security benefits altogether, no matter how much someone earns. This completes a gradual plan to eliminate the tax over several years. With this change, just eight states will continue taxing Social Security at the state level.
While these changes might seem small or technical, they can make a meaningful difference. From slightly larger monthly payments to lower tax bills or higher income thresholds, staying informed about Social Security updates helps retirees better manage their finances from year to year.