Last month, the Social Security Administration announced the newest cost-of-living adjustment (COLA), which will take effect in January 2026. Beneficiaries can expect a 2.8% raise next year, which will amount to around $56 per month for the average retired worker.
This COLA is higher than the initial projection of 2.7%, which can be good news for Social Security recipients. But that's not the only positive change coming in 2026. Here's what retirees and those close to retirement can expect heading into next year.
Image source: The Motley Fool.
1. Higher earnings limits for those who are working
If you're working while taking Social Security, your earnings can sometimes limit how much you can receive in benefits. Those who are under their full retirement age (FRA) will be subject to annual income limits, and if your wages surpass those limits, your benefit will be at least partially withheld until you reach your FRA.
There are two different earnings test limits: one for those who won't reach their FRA in 2026 and another for those who will. The good news is that both of these caps will increase from their 2025 levels, meaning retirees can earn more in income before facing benefit reductions.
| 2025 Income Limit | 2026 Income Limit | Benefit Reduction | |
|---|---|---|---|
| If you'll be under your FRA in 2026 | $23,400 | $24,480 | $1 reduction for every $2 over the limit |
| If you'll reach your FRA in 2026 | $62,160 | $65,160 | $1 reduction for every $3 over the limit |
Source: Social Security Administration.
These withholdings have always been temporary, and retirees can expect to receive larger checks after they reach their FRA to account for the reductions. But in the short term, higher income limits mean you can keep more of your benefits if you continue to work.
2. Higher maximum benefit
For those who haven't yet claimed Social Security, a higher maximum benefit is on the table. Starting in 2026, the most you'll be able to collect is $5,251 per month -- up from $5,108 per month in 2025.
Achieving the highest possible payment is tricky, but if you meet these three requirements, you may be on track to get there:
- Work for 35 years: Your primary insurance amount -- the benefit you'll collect at your FRA -- is calculated using an average of your wages throughout the 35 years of your career you earned the most. You'll need to have worked for at least 35 full years to qualify for the max payment, as anything less than that will introduce zeros into your earnings average and reduce your benefit.
- Delay claiming until age 70: If you file at your FRA, the highest benefit you can receive is $4,152 per month in 2026. While that's still a considerable amount, you'll need to wait to file until age 70 if you want to max out your monthly payment.
- Consistently reach the maximum taxable earnings limit: This limit is the highest income subject to Social Security taxes, and the closer you can get to it, the larger your benefit will be. It changes most years, but in 2026, it will be $184,500 -- up from $176,100 in 2025. To earn the maximum payment, you'll need to have consistently reached this income limit throughout your career.
Most workers will not reach the maximum benefit, and that's OK. Getting as close as you can to any of those three requirements can still increase your benefit, no matter how much you're on track to receive.
A new year brings a fresh set of changes to Social Security, and while many of these adjustments are minor, they can still result in more cash in your pocket in 2026.
