The Social Security program currently provides a monthly benefit income to around 74 million vulnerable Americans, many of whom really rely solely or primarily on their monthly benefit checks to get by. This year, however, has been one of many changes at the agency as the new administration stepped into office. The year is still far from over, and, as such, there still may be some changes in the pipeline that beneficiaries should keep an eye out for.
Some of the upcoming changes worth noting include the 2026 COLA announcement later in October, the Full Retirement Age, which will increase one final time in 2026, the additional tax relief under the new One Big Beautiful Bill Act, and some changes to both the wage base limit, as well as the earnings test limit. Here is what you need to know.
Social Security COLA 2026
The annual COLA, or Cost of Living Adjustment, is an adjustment made to benefit amounts each year to account for the effects of inflation. The COLA measures data from the CPI-W of the third quarter of the current year against the same data of the previous year, and, if there is an increase, this figure becomes the COLA increase for the upcoming year.
Since the COLA is determined using third-quarter inflation data, the announcement is made annually in October. For 2025, the COLA came in at 2.5%, and, as a result, benefits were increased by 2.5% in January. Early predictions from experts showed a projected 2.5% COLA again for 2026; however, following the release of June and July data, various field experts have estimated a COLA of 2.7% for next year.
New tax break under the One Big Beautiful Bill Act
On July 4th, the One Big Beautiful Bill Act had officially been signed into law by the president, and included in the approximately 1,000-page legislation was an additional tax deduction of $6,000 for seniors aged 65 and above. While claims have been made that the OBBBA eliminates taxes on Social Security income, it is more of a change in income thresholds that has resulted in a higher number of beneficiaries being exempt from paying taxes on their benefit income.
Furthermore, the tax relief will only be in effect for a temporary period starting in 2025 and ending in 2028. As such, during this period, seniors aged 65 and older will be able to benefit from an additional tax break of $6,000 for single filers, and $12,000 for joint filers if their modified adjusted gross income is below $75,000 for single filers, and $150,000 for joint filers, respectively.
Full Retirement Age increase
While Social Security can be claimed from age 62, the Full Retirement Age (FRA) is the age at which a retiree becomes eligible to claim their full benefits. In 2025, the Full Retirement Age was increased to 66 years and 10 months for those born in 1959. The FRA has been gradually increasing in two-month increments since the ’90s so as to account for higher life expectancy.
As per the amendments, the FRA would stop increasing once it reaches 67 for those born in 1960 and later, which will happen in 2026. However, Congress may opt to increase the FRA further in order to aid the finances of the program, which is projected to reach insolvency by 2033, triggering an automatic cut to benefits, according to the latest annual report from the Social Security Board of Trustees.
Wage base limit and earnings test limit
Social Security is funded primarily through a dedicated payroll tax wherein 12.4% of a worker’s earnings are contributed. There is, however, also a limit regarding how much of your income is taxed, and this is known as the wage base limit. For 2025, the wage base limit is $176,100, which means that any income earned beyond this figure will not be taxed for Social Security.
If you claim benefits prior to reaching your FRA while still working, you may be subject to a retirement earnings test (RET). If you will not reach your FRA in 2025, the earnings limit is $23,400, and, as such, if you earn above this figure, you will lose $1 in benefits for every $2 earned above the limit.