As anticipation for the 2026 COLA announcement grows for Social Security beneficiaries, their benefit checks could potentially be reduced even as the COLA increase takes effect next year. The Social Security program currently has around 74 million beneficiaries, and the average benefit check is just under $2,000.
Social Security benefits can be overwhelming to navigate if you are not properly informed about how the program works. While you can begin claiming benefits at age 62, there is also a Full Retirement Age (FRA), which has been increasing in two-month increments over the course of several years. In 2026, the FRA will increase one last time to 67 for those born in 1960 and later.
For 2025, the FRA increased to 66 years and 10 months for those born in 1959. As such, claiming before you reach your FRA is considered claiming early, and, as a result, your benefits will likely be reduced until you reach your FRA. Claiming early is not the sole reason your benefits may be cut, however. Here are three other reasons why your benefit check can be reduced.
Federal taxes on Social Security benefits
The taxation of Social Security benefits has been a major topic of debate following the enactment of the One Big Beautiful Bill Act. Under this new legislation, seniors age 65 and older can benefit from an additional $6,000 tax deduction if their income is below the $75,000 threshold. Both the White House and the Social Security Administration (SSA), however, initially suggested that taxes on Social Security benefits had been eliminated for almost all seniors, which is not the case.
Up to 85% of your Social Security income can be subject to taxation if your income exceeds certain thresholds. Legislation enacted in 1993 “increased the limitation on the amount of benefits subject to taxation from 50 percent to 85 percent for single taxpayers with incomes over $34,000 and for taxpayers filing jointly with incomes over $44,000,” as per the SSA.
“The Big Beautiful Bill is a good start on providing financial relief for American seniors,” TSCL Executive Director Shannon Benton noted in a recent press release. “The next priority should be providing support for the estimated 7.3 million American seniors who are living on less than $1,000 per month, which is below the federal poverty line.”
As such, depending on your total income—particularly for those with additional sources of income—you may end up losing a portion of your benefit to taxes.
Medicare premiums
Medicare is a health insurance program for seniors 65 and older; however, those younger than 65 with certain disabilities or conditions may also qualify. Seniors enrolled in Medicare Part B will likely have their monthly premium—currently a little under $200—automatically deducted from their Social Security check.
According to the 2025 Medicare Trustees report, the Part B premium is projected to increase by around 11.6% in the upcoming year. This would bring the standard premium up from $185 to $206.50. At the same time, the upcoming COLA is currently estimated at around 2.7%, which means much of that increase could be offset by higher Part B costs.
Earnings test
If you are considering claiming benefits early while continuing to work, it is important to factor in the retirement earnings test (RET), which can reduce your benefits if your earnings exceed certain limits. For 2025, if you have not yet reached your FRA and will not reach it during the year, you will lose $1 in benefits for every $2 you earn above the $23,400 threshold.
If you do reach your FRA during the year, you will lose $1 in benefits for every $3 you earn above $62,160. It is also worth noting that these reductions are temporary; once you reach your FRA, your benefit amount will be recalculated.