Nylie Nelson
As 2026 approaches, retirees and soon-to-be retirees should prepare for three major Social Security changes that will impact benefit amounts, taxes, and income thresholds.
While many of these adjustments happen annually, the Social Security Administration’s 2026 estimates could bring surprises to those who aren’t closely following policy updates.
If you rely on Social Security for retirement income, here’s what you need to know to plan ahead and protect your finances.
1. 2026 COLA Adjustment Will Boost Benefits
The Cost-of-Living Adjustment (COLA) helps Social Security benefits keep pace with inflation, ensuring that retirees don’t lose purchasing power over time. In 2026, the estimated COLA is 2.7%, according to the Social Security Board of Trustees.
Here’s what that increase means for average beneficiaries:
| Beneficiary Type | 2025 Avg. Benefit | 2026 Est. Benefit (2.7% COLA) | Monthly Increase |
|---|---|---|---|
| Retired Worker | $2,002 | $2,056 | $54 |
| Spouse | $950 | $976 | $26 |
| Survivor | $1,567 | $1,609 | $42 |
| Disabled Worker | $1,582 | $1,625 | $43 |
While 2.7% may seem modest compared to recent years, it still provides meaningful relief as inflation continues to affect the cost of living.
Note: Final COLA numbers will be announced in October 2025, based on Q3 CPI data.
2. Higher Payroll Taxes for High Earners
Most workers pay 6.2% of their income toward Social Security, but only up to a certain limit. That limit—known as the maximum taxable earnings—is set to increase from $176,100 in 2025 to $183,600 in 2026.
Here’s how that affects high-income earners:
| Year | Taxable Earnings Limit | Max Social Security Tax (6.2%) |
|---|---|---|
| 2025 | $176,100 | $10,918.20 |
| 2026 | $183,600 | $11,383.20 |
| Increase | — | +$465 |
Anyone earning above the current wage base will pay $465 more in Social Security taxes next year. This change helps ensure the long-term sustainability of the program.
3. Higher Income Limits Before Benefits Are Withheld
If you’re collecting Social Security before your Full Retirement Age (FRA) and still working, your benefits may be partially withheld if you earn above specific thresholds. These are known as the Retirement Earnings Test (RET) limits.
For 2026, the SSA estimates increases in both RET categories:
| RET Category | 2025 Limit | 2026 Est. Limit | Withholding Rule |
|---|---|---|---|
| Under FRA Entire Year | $23,400 | $24,360 | $1 withheld for every $2 earned above the limit |
| Reaching FRA in 2026 | $62,160 | $64,800 | $1 withheld for every $3 earned above the limit |
These updates mean you’ll be able to earn more in 2026 before any benefit reduction kicks in—helpful for semi-retired workers or those transitioning out of full-time employment.
Why These Changes Matter
These upcoming changes are not just administrative—they affect retirees’ bottom lines, tax liabilities, and financial planning strategies. For example:
- COLA increases can offer stability during inflationary periods.
- Higher income limits allow more flexibility for working retirees.
- Rising taxable wage limits will affect high earners still contributing to Social Security.
The three Social Security changes coming in 2026—a 2.7% COLA, higher payroll tax caps, and increased income limits for early retirees—reflect a broader effort to keep the program sustainable while helping retirees keep pace with inflation.
Whether you’re already retired or planning your retirement strategy, now is the time to adjust your financial plans accordingly.
By staying informed and proactive, retirees can make the most of what Social Security offers in 2026 and beyond.
FAQs
What is the estimated COLA for Social Security in 2026?
The projected Cost-of-Living Adjustment (COLA) for 2026 is 2.7%, boosting average retirement payments by about $54 per month.
Will I pay more Social Security taxes in 2026?
Yes, if your income exceeds $183,600, your Social Security payroll tax could increase by up to $465 in 2026.
How much can I earn in 2026 without losing Social Security benefits?
If you’re under FRA, the 2026 income limit will rise to $24,360, allowing you to earn more before benefits are reduced.