Whilst retirement may be a reward for a lifetime of work, it can also place you in a somewhat vulnerable position in terms of financial stability. This is where the Social Security program comes into play. For close to a century now, the Social Security program has been a source of financial stability to millions upon millions of people across the country. The process is relatively simple: you contribute a portion of your monthly earnings towards the dedicated Social Security payroll tax and further down the line when you are ready to retire, you will become eligible to claim benefits from the Social Security Administration (SSA).
In order for a program that supports such a high volume of beneficiaries to sustain itself in the longterm, change becomes inevitable. As the year begins wrapping up and preparations for the new year begin, here are several Social Security changes to take note of.
2.8% COLA increase
One recurring change that takes place annually in the program is the Cost of Living Adjustment (COLA). The COLA is an annual increase implemented to all benefits issued by the SSA so as to counter the effects of year over year inflation. The COLA is measured by taking the CPI-W for the third quarter of the year and measuring it against the same data for the same period of the previous year. If there is an increase, this becomes the next COLA.
In 2025, beneficiaries across the country received a 2.5% increase to their benefits. Following the October 24th announcement from the SSA, we now also know that all benefits will receive a 2.8% increase in 2026. Relative to the average retiree benefit check, this 2.8% boost will translate to around $56 more.
Retirement earnings limits
If you have claimed benefits before reaching full retirement age (FRA) and are also working, you will be subject to a retirement earnings test. If your income exceeds the stipulated thresholds, a portion of your benefits will be withheld until you reach FRA. The earnings limits will be increasing in 2026, which means that retirees will soon be able to earn a bit more before their benefits are subject to withholding.
The retirement earnings limits for 2026 are outlined as follows:
- If you will not reach FRA for the full year in 2026, the earnings limit is $24,480. For every $2 you earn above $24,480, you will lose $1 of your Social Security benefit.
- If you are going to reach FRA within the year, the earnings limit for 2026 is $65,160. For every $3 you earn above $65,160, you will lose $1 of your Social Security benefit.
Once you reach FRA, your benefits will not longer be withheld and the SSA will recalculate your benefit amount. Additionally, the benefit money that had been withheld will also eventually be paid back to you.
Wage cap increase in 2026
When paying into the Social Security payroll tax, there is a limit regarding how much of your income is considered for your contribution. This is known as the wage cap and in 2025, the wage cap is $176,100.
In the October 24th COLA announcement, the SSA also shared that the wage cap will be increasing to $184,500 in 2026.
Work credits
When you pay into the Social Security payroll tax, you earn work credits. In order to become eligible for retiree benefits, you will need a minimum of 40 work credits, and each year you can earn up to 4 work credits. The value of one work credit in 2025 is $1,810, however, this will be increasing to $1,890 in 2026.
Maximum monthly benefit
Since the SSA limits how much of your income is considered for the payroll tax, it also has a maximum amount it pays out in benefits. In 2025, the maximum benefit for a retiree who claims at FRA is $4,018. With the COLA increase, there maximum benefit amount will increase to $4,152 in 2026.
Retirement Age
The full retirement age has been increasing in two month increments since the 1983 amendments where it was decided that the FRA should be moved up to 67. This was done to maintain the financial health of the program, as well as to account for higher life expectancy.
In 2025, the FRA increased to 66 years and 10 months for those born in 1959. In 2026, the FRA will increase one final time to 67 years of age for those born in 1960 and later. Following this, the FRA will no longer increase.