This year, the highly anticipated Cost of Living Adjustment (COLA) announcement had been delayed from October 15th to October 24th due to the ongoing federal government shutdown. Now that October 24th has come and gone, we now know that all benefits will be receiving a 2.8% increase in 2026.
The COLA increase is not the only change that will be taking effect as the new year sets in. Here are some of the other important changes to the Social Security program that are worth taking note of.
COLA increase
The 2026 COLA increase is slightly higher than that of 2025 which came in at 2.5%, however, the COLAs for both years read as average from a historical standpoint. A 2.8% COLA increase will bring to the average benefit check around $56 more each month starting in January.
Parallel to this, Medicare Part B premiums are also projected to increase by a staggering 11.6%, bringing the cost of the premium up from $185 to around $206.50. This premium hike will likely eat away at around a third of the COLA increase.
Wage cap increase
When contributing to the Social Security payroll tax, there is a limit in place regarding how much of your income is considered. This is called the maximum taxable earnings or wage cap. In 2025, the wage cap is $176,100, however, this will be increasing to $184,500 in 2026. This means that those earning higher incomes will have to make a bigger contribution to the Social Security payroll tax in the new year.
Maximum benefit increases
Because of the limit on how much of your income is considered for the Social Security payroll tax, the SSA also has a maximum benefit amount that it will pay out. In 2025, the maximum benefit for a retiree claiming at full retirement age is $4,018, and the maximum benefit for someone who had delayed their retirement until age 70 is $5,108.
Both of these maximums will be increased in the new year once the COLA increases take effect. For a retiree claiming at full retirement age in 2026, the maximum benefit will have increased to $4,152.
If you delay claiming until you are 70, for every year that you delay your claim beyond your full retirement age, you will receive an 8% increase to your benefits. If, for instance, someone with a retirement age of 66-67 delays claiming until 70, they will receive 124% of their benefit.
Retirement earnings limits increase
If you have claimed benefits early and are also continuing to work and earn an income, you will be subject to a retirement earnings test. If your income exceeds the specific thresholds, a portion of your benefits will be withheld. It is worth noting that this reduction is only temporary and once you reach your full retirement age, you will once again be entitled to your full benefit amount regardless of your income.
There are two retirement earnings limits depending on how close you are to your full retirement age, with both limits set to increase in 2026. Here is a breakdown of the earnings limits, as well as how much of your benefits will be will be lost if you exceed these limits for 2026:
- If you are claiming benefits while working and you will not reach FRA for the full year, the earnings limit will be $24,480 in 2026 (increased from $23,400 in 2025). As such, for every $2 you earn above this limit, $1 of your benefits will be will be reduced.
- If you are going to reach FRA within the year, the retirement earnings limit will be $65,160 in 2026 (increased from $62,160 in 2025). As such, for every $3 you earn above this limit, $1 of your benefit will be lost.
Work credit value increases
In order to claim benefits, you will need to have earned a minimum of 40 work credits by paying into the Social Security payroll tax. You can earn a maximum of 4 work credits each year. In 2025, the value of one work credit is $1,810, however, the value of one work credit will be increasing in 2026.
In 2026, the value of one work credit will equate to earnings of $1,890.