Each new year brings new change with it and in terms of the Social Security program, this sentiment often holds true as well. The most notable change beneficiaries across the country will see in 2026 is, of course, the COLA increase taking effect. The COLA announcement was made on October 24th following delays due to the federal government shutdown.
Starting in January 2026, all benefits issued by the Social Security Administration (SSA) will be increased by 2.8%, which will allow the benefit check to retain some of its buying power in the face of inflation. Benefit amounts are not the only thing that will be changing in the new year now that the COLA announcement has been made. Here are six upcoming changes regarding Social Security that are worth noting if you are retired or nearing retirement.
1. COLA increase takes effect in January
The COLA, or Cost of Living Adjustment, is an annual increase implemented across all benefits in order to account for year over year inflation. The formula used by the SSA to determine the COLA takes the CPI-W for the third quarter of the year and measures it against the same data for the same period of the previous year. If there is an increase, this becomes the next COLA.
In 2026, beneficiaries across the country will receive a 2.8% raise to their benefits. This will amount to around $56 more in the average benefit check. The 2.8% increase will also be implemented to the Supplemental Security Income. This will bring the monthly SSI total up to $994 and it will be reflected starting in the December 31st payment (which is the January SSI) as per the schedule.
2. Social Security wage cap increase
When paying into the Social Security payroll tax, there is a maximum taxable earnings figure in place. This cap is there because the SSA also has a maximum benefit it pays out. This means that once your income exceeds the wage cap, the excess does not count towards your Social Security payroll tax contributions.
In 2025, the wage cap is $176,100 and this will increase to $184,500 starting in 2026. By increasing the wage cap, the program, which is on the cusp of insolvency, will have a bit of additional revenue to work with.
3. Work credit requirement and maximum benefit increase
When you pay a portion of your earnings into the Social Security payroll tax, you earn something called work credits. In order to claim Social Security benefits when you retire, you will need to have accumulated a specific number of work credits.
Credits are determined relative to annual earnings, and in both 2025 and 2026, you will still need to have earned 40 credits to become eligible for benefits. The value of one credit in 2025 is $1,730 and this will increase to $1,890 in 2026.
The maximum benefit paid by the SSA at full retirement age currently amounts to $4,018. This is projected to increase in 2026 and the SSA will confirm the exact figure by December as it reflects both inflation and wage growth.
4. Full Retirement Age reaches 67
In 1983, the Social Security program was amended to increase the full retirement age (FRA) gradually until it reaches 67 from 65. This was done during a time where the program faced looming financial crisis and life expectancy had grown. As such, the FRA has been increasing in two month increments each year.
In 2025, the FRA rose to 66 years and 10 months for those born in 1959. In 2026, the FRA will finally reach 67 years of age for those who are born in 1960 and later, and it is not meant to increase beyond this.
5. Earnings limit increase
Benefits can be claimed from age 62, however, this is considered as claiming early since you have not reached FRA. Claiming early can reduce your benefits by up to 30%, and if you are still earning an income whilst claiming, you will also be subject to a retirement earnings test.
In 2026, if your income exceeds a certain threshold and you will not reach FRA for the full year, for every $2 you earn above the new $24,480 earnings limit, you will lose $1 of your benefit.
If you will be reaching FRA within the year, the limit is higher. For every $3 you earn above the new $65,160 earnings limit in 2026, you will lose $1 of your benefit.
6. Projected shortfall
Despite the higher wage cap on Social Security payroll taxes, the program is still on a rather short path to insolvency as per the annual report from the Social Security Board of Trustees. If no solution is found now, the OASI or the OASDI trust funds will be emptied, triggering a 19%-23% cut to benefits.