Starting in January 2026, Social Security will go through three major changes that will impact both current retirees and people who are still working. These changes involve the yearly cost-of-living increase, a higher full retirement age, and a rise in the maximum amount of earnings that can be taxed for Social Security.
For the millions of Americans who depend on Social Security, either as a main source of income or as extra support during retirement, it’s important to stay informed about these updates. Some of these changes will result in higher monthly checks, while others may affect when you choose to retire or how much of your paycheck is taxed.
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What Is Social Security and Who Benefits?
Social Security is a federal program that provides monthly payments to eligible Americans, mainly retirees, disabled individuals, and survivors of deceased workers. Workers pay into the program through payroll taxes, and in return, they receive benefits once they reach retirement age or meet other conditions.
Over 71 million people receive Social Security benefits today. For many, it’s a critical part of their income, especially during retirement. Because the cost of living goes up over time, the Social Security Administration adjusts benefits to help keep up with inflation. These adjustments, along with changes in retirement age and tax limits, are meant to keep the program financially stable and fair for everyone.
Cost-of-Living Adjustment (COLA) in 2026
One of the most anticipated changes is the annual cost-of-living adjustment, or COLA. This is the percentage by which Social Security checks increase to help match inflation.
In 2025, the COLA was 2.5%. According to the latest estimates from experts, the COLA for 2026 is expected to be about 2.7%. That means the average monthly Social Security benefit for a retired worker could rise from around $2,006.69 to approximately $2,060.87, an increase of about $54 per month.
The official COLA number for 2026 will be announced in mid-October 2025, after the government reviews inflation data for the third quarter of the year.
Full Retirement Age Will Be 67 for Everyone Born in 1960 or Later
Another big change in 2026 is that the full retirement age will officially be 67 for people born in 1960 or after. This age is when someone can receive their full Social Security benefits without any reduction.
For many years, the full retirement age was 65. But a law passed in 1983 gradually raised it. That change is now complete. Starting in 2026, anyone turning 62, the earliest age you can claim benefits, will face up to a 30% reduction if they start before reaching age 67.
This does not affect the early retirement age, which remains at 62, or the maximum benefit age of 70, when delaying retirement brings the largest monthly payments.
Higher Maximum Taxable Earnings
In 2026, more of a worker’s income will be subject to Social Security tax. The maximum taxable earnings, which is the most income that Social Security taxes can be taken from, is expected to rise from $176,100 in 2025 to about $183,600 in 2026.
This means that workers earning above that limit will pay Social Security taxes only on the first $183,600 of their income. The Social Security tax rate remains at 6.2% for employees, so someone at the maximum could pay up to $11,383.20 in Social Security taxes, up from $10,918.20 in 2025.
Extra Tax Break for Seniors, A Bonus Deduction
Although not part of the Social Security program, a new tax deduction will benefit many older Americans starting in 2026. A recent law offers an extra standard deduction of $6,000 for individuals and $12,000 for married couples over 65. This “senior bonus” aims to reduce or eliminate taxes on Social Security benefits for lower- and middle-income retirees.
However, it only applies through 2028 and begins to phase out for single filers with income over $75,000 and couples earning over $150,000. Those with very high incomes won’t qualify.
These upcoming changes demonstrate how Social Security continues to adapt to the times, aiming to keep up with inflation and changes in the workforce. Whether you’re already receiving benefits or planning for retirement, it’s important to stay updated so you can make smart decisions about your financial future.