Social Security rules affect both current workers and retirees, so it is important that everyone keep up to date on the different changes that are happening within this important entitlement program. For example, some big changes are set for 2026 that will affect the finances of millions of Americans.
With less than six months left until these changes roll out, it's best to start preparing now so that you are ready for the financial impact of the rule shifts that are taking place, several of which could affect your bank account. Here's what you need to know about three Social Security changes that are coming down the pipeline.
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1. Retirees will see a benefits increase -- but a small one
One big change that retirees need to be ready for in 2026 is a change in the amount of their benefit checks. That's because Social Security recipients are on track for a cost of living adjustment (COLA) in the coming year.
COLAs happen in most, but not all, years. There is a formula built into the benefits program to enable Social Security benefits to increase automatically to keep pace with inflation. If the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) shows that prices are going up, then those receiving Social Security benefits get a benefit increase calculated based on CPI-W changes that happen during the third quarter of the year.
While there will not be an official announcement of the COLA until October, experts project that benefits will go up around 2.6% next year. While this sounds good, Medicare premiums are expected to increase substantially next year as well. Since most retirees have these premiums withdrawn from their benefits, most seniors will get only a very small benefit bump.
Retirees should prepare themselves for the fact that they'll get a small raise next year and should start getting ready to take a careful look at their budget in order to ensure their Social Security and savings will stretch far enough to make ends meet.
2. Seniors will be able to work more without their benefits being affected
There's another change coming next year as well. Retirees can expect to be able to work more before reaching full retirement age without their benefits being affected.
Under the law, those who have already reached full retirement age can work as much as they want with no impact on their Social Security payments. Those who have not yet hit that milestone will see their benefits reduced if they earn too much. In 2025, the limit is $23,400 if you don't hit FRA at all during the year, and you lose $1 in benefits for every $2 above the limit once you hit it. For those who haven't yet hit FRA but will during the year, the limit is $62,160, and you lose $1 in benefits for every $3 earned above that limit. While the losses are temporary and benefits are recalculated at FRA to account for income you didn't earn, these rules still prevent getting a big paycheck and getting benefits.
These limits are expected to increase in 2026, so retirees can start preparing to increase their hours and income if they are double-dipping and getting both benefits and paychecks but have been holding back on working too much to avoid affecting their benefits.
3. Some current workers will owe more in Social Security taxes
Finally, changes to Social Security coming in 2026 are going to affect current workers too. Specifically, high earners will be impacted. That's because the wage base limit, or maximum wage subject to Social Security tax, is changing. In 2025, anyone who earns above $176,100 does not have to pay Social Security taxes on income above that limit. The amount also won't be counted when their retirement benefits are calculated.
The wage base limit will increase in 2026, so those who earn more than $176,100 will have to pay Social Security taxes on more of their money. The good news is, the extra they have to pay will be factored into their average salary when their benefits are calculated, so they should get more Social Security benefits in the future because of it. Still, it's important to start preparing your finances now for the added taxes.
Both current and future retirees would do well to prepare for these changes to Social Security in 2026 because the year is more than half over, you have less than six months to get ready, and January will be here before you know it.
