If you are a beneficiary of the Social Security program or if you are nearing retirement, it is well worth it to keep an eye on any and all updates or changes with the program. As 2025 rapidly approaches its close, a number of Social Security changes have been confirmed and will take effect starting in the new year.
As such, here are five important Social Security changes worth taking note of to ensure you are well informed regarding your retirement.
2.8% COLA increase
Each year since 1975, benefit amounts undergo an increase that is aimed at countering the effects of year over year inflation. This increase is called the Cost of living Adjustment (COLA) and it is announced by the Social Security Administration (SSA) in October each year.
The COLA announcement had faced delays this year due to the ongoing federal government shutdown. Following a special concession from the Bureau of Labor Statistics, however, the SSA was finally able to calculate and announce the COLA on October 24th. The 2026 COLA will bring Social Security recipients across the country a 2.8% bump to their benefits.
This translates to around $56 more in the average benefit check. Medicare Part B premiums are also projected to face a hefty price hike, which will ultimately eat away at a significant portion of the COLA increase.
Wage cap increase
The wage cap is the maximum amount of an individual’s income that is considered when they are paying into the Social Security payroll tax. In 2025, the wage cap is $176,100. The wage cap fluctuates on a yearly basis relative to average wages and inflation.
As such, the wage cap will be increasing again in 2026 to $184,500.
Higher retirement earnings limit
If you have claimed Social Security benefits early but are also working and earning an income, you may be subject to a retirement earnings test. If your income exceeds certain thresholds, a portion of your benefits will be withheld.
This benefit reduction is temporary and will only remain in effect if you have not reached your full retirement age. Once you reach full retirement age, you may earn an income of any amount and your benefits will not be impacted.
If you are claiming benefits and working but you will not reach FRA for the full year, the earnings limit will be $24,480 in 2026 (increased from $23,400 in 2025). This means that for every $2 you earn above this limit, $1 of your benefits will be will be reduced. Alternatively, 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). For every $3 you earn above this limit, $1 of your benefit will be lost.
Work credits
In order to claim benefits upon retirement, you will need to have earned a minimum of 40 work credits. Work credits are earned by paying into the Social Security payroll tax and you can earn a maximum of 4 work credits each year. In 2025, one work credit equates to $1,810 in earnings.
The value of one work credit will be increasing to $1,890 in 2026. This means that in order to earn the maximum four work credits in 2026, you will need to earn a minimum of $7,560.
Maximum monthly benefit amount slated to increase
The wage cap and the maximum monthly benefit amount go hand in hand. Because the SSA limits how much of your income can be taxed for Social Security, it also has a maximum amount it will pay in benefits.
In 2025, the maximum monthly benefit paid by the SSA amounts to $4,018, and applies to beneficiaries claiming at full retirement age. In 2026, the maximum monthly benefit amount paid by the agency will increase to $4,152 for beneficiaries claiming at full retirement age.
It is also worth noting that if you delay your retirement until age 70, you could potentially earn a higher figure in benefits than the aforementioned amounts.