From one year to the next, the Social Security program will likely undergo some changes in order to help maintain its longevity. Some changes are minor, while others could be major, and some changes are even an annually recurring constant. One annual Social Security change that is highly anticipated by beneficiaries across the country is the Cost of Living Adjustment (COLA). The COLA is an annual increase implemented to all benefits relative to the year over year increase in inflation.
The COLA is typically announced in October each year as the COLA calculation uses CPI data for the third quarter of the year in its calculation. Alongside the COLA increase, the Social Security Administration (SSA) also shares other limit or requirement updates that will take effect in the new year.
The 2026 COLA increase was officially announced at 2.8% by the SSA on October 24th. However, benefits are not the only thing set to increase in the new year. Here are 4 important Social Security changes for 2026 that are important to take note of if you are retired or planning to claim Social Security once you do retire.
2.8% COLA boost
The most anticipated and talked about Social Security change for 2026 is the annual COLA increase. The COLA is determined by measuring the third quarter CPI-W year over year, with any increase becoming the next COLA. The October 24th announcement from the SSA confirmed that all benefits issued by the SSA will be increased by a modest 2.8% in 2026.
A 2.8% benefit boost would bring a retiree earning the average benefit amount around $56 more in their check starting in January. While a $56 bump to the benefit check will readily be welcomed, the not so great news for seniors is that the COLA boost will really only look like an additional $35. This is because Medicare Part B premiums are also projected to face a staggering 11.6% increase in 2026.
This cost hike would bring the premium up from $185 to $206.50, and since Part B premiums are automatically deducted from Social Security benefits, around a third of the COLA increase will be eaten up by the new Part B premium cost.
Higher wage cap for 2026
In order to become eligible for Social Security upon retirement, you will need to have contributed towards the Social Security payroll tax during your working career. The SSA has a limit in place regarding how much of your income is considered for this contribution and this is called the maximum taxable earnings or the wage cap.
In 2025, the wage cap is $176,100, however, this will be increased to $184,500 in 2026. This wage cap increase will largely affect higher earners as their contributions to the payroll tax will now be bigger.
Increased work credit value
When you pay into the Social Security payroll tax, you earn work credits. In order to claim benefits from the SSA upon retirement, you need a minimum of 40 work credits, and each year you can earn a maximum of 4 work credits.
In 2025, the value of one work credit is $1,810, however, this will be increasing to $1,890 in 2026. Full-time workers may not necessarily notice this difference, however, part-time workers may need to increase their hours if they are aiming to earn the maximum 4 work credits for the year.
Higher retirement earnings limits
If you have claimed benefits before reaching full retirement age (FRA) and are also working to earn an income, you will be subject to a retirement earnings test. If your income exceeds certain thresholds, part of your Social Security benefit will be withheld. Once you reach FRA, your benefits will be recalculated and the benefit money that had been withheld will be paid to you eventually.
In 2026, the retirement earnings limits will be increased as follows:
- If you will not reach FRA for the full year, the earnings limit will be increased from $23,400 to $24,480. For every $2 you earn above $24,480, you will lose $1 of your benefit.
- If you are going to reach FRA within the year, the earnings limit will be increased from $62,160 to $65,160. For every $3 you earn above $65,160, you will lose $1 of your benefit.