A program as widely depended upon as the Social Security program often requires changes and updates from one year to the next so as to ensure it runs smoothly and its longevity is increased. The most highly anticipated change implemented to benefits on a yearly basis would be the Cost of Living Adjustment (COLA) whereby benefit amounts are increased relative to any year over year inflation hikes. The COLA announcement is usually made mid-October upon the release of the September CPI, however, the announcement was pushed back from the 15th to the 24th of October this year due to the ongoing federal government shutdown.
Despite the delays, the Social Security Administration (SSA) was able to announce a COLA increase of 2.8% for all benefits issued by the agency in 2026. Along with an increase to benefits, there are several other limits or requirements that will be changed in the new year. Here are four important changes to the Social Security program that will take effect as of 2026.
2.8% COLA increase for all beneficiaries in 2026
Starting with the January round of payments in 2026, all benefits issued by the SSA will receive a modest 2.8% increase. Relative to the average retiree check which comes in at around $2,008, the 2.8% COLA Boost will bring an additional $56 more to retirees.
Of this $56 increase, a number of retirees will lose around $21.50 before their benefit check event hits their bank accounts. This is because the Medicare Part B premium is projected to face an 11.6% increase in the upcoming year. A premium hike of 11.6% would bring the cost of the Part B premium up from $185 to $206.50. This would then significantly reduce the value of the COLA boost to around $35 since Part B premiums are automatically deducted from Social Security benefits.
Maximum taxable earnings increase in 2026
The SSA limits how much of your earnings are considered when you pay into the Social Security payroll tax. This limit is known as the maximum taxable earnings or the wage cap, and this limit is in place because the SSA also has a maximum amount that it will pay out in benefits. The wage cap is determined in relation to average wages and inflation, and as such, the limit fluctuates from year to year.
In 2025, the wage cap is $176,100. Alongside the 2026 COLA announcement, the SSA also shared that the wage cap will be increased to $184,500 in 2026. This means that higher earners will be making bigger contributions towards the Social Security payroll tax in 2026.
Work credit value increase
In order to claim benefits from the SSA, you will need to have earned a minimum of forty work credits. Work credits are earned by contributing a portion of your earnings towards the Social Security payroll tax. You can earn a maximum of 4 work credits per year, and one work credit equates to $1,810 in 2025.
The value of one work credit will be increasing in 2026 to $1,890. This $80 increase will largely affect part-time workers more so than full time workers, and as such, it is worth keeping track of the value of a work credit each year.
Retirement earnings limits increase
If you claim Social Security before reaching your full retirement age (FRA) and are also continuing to work, you will be subject to a retirement earnings test. If your income exceeds certain thresholds, part of your benefits will be withheld until you reach your FRA.
In 2026, retirees will be able to earn a little bit more before their benefits are withheld as the retirement earnings limits are set to increase. The retirement earnings limits will be increased in 2026 as follows:
- If you are claiming benefits whilst working and will not reach FRA for the full year, $1 of your Social Security benefit will be reduced for every $2 you earn above $24,480 (increased from $23,400 in 2025).
- If you are claiming benefits whilst working and you will be reaching FRA within the year, $1 of your Social Security benefit will reduced for every $3 you earn above $65,160 (increased from $62,160 in 2025).