Next year will bring a slew of changes to the Social Security program, from a new cost-of-living adjustment (COLA) to a higher maximum benefit to raised earnings test limits.
But not all of the changes are positive, and there's some not-so-good news awaiting retirees in 2026, too. Here's everything retirees need to know about what's ahead with Social Security.
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Big changes are coming in 2026
Let's start with the good news: Your benefit will go up next year. Social Security recipients can expect a 2.8% COLA in 2026, which will amount to a raise of around $56 per month for the average retired worker.
A new COLA also means that the maximum benefit amount will be going up, sitting at a whopping $5,251 per month in 2026 -- up from $5,108 per month in 2025. The requirements for the max benefit remain the same: Work for at least 35 years, wait until age 70 to file, and consistently reach the maximum taxable earnings limit.
Part of the not-so-good news, however, is that the maximum taxable earnings limit will be going up next year. This limit is the highest income subject to Social Security tax, and it's increasing from $176,100 per year in 2025 to $184,500 per year in 2026. In other words, you'll need a higher salary to stay on track for the maximum payments.
One other positive for retirees, though, is that if you're working while collecting benefits and under your full retirement age, you may be able to keep more of your money in the short term. The two earnings test limits will be increasing in 2025, meaning you can earn more before facing benefit reductions.
| Income Limit: 2025 | Income Limit: 2026 | Benefit Reduction | |
|---|---|---|---|
| If you won't reach your full retirement age in 2026 | $23,400 per year | $24,480 per year | $1 reduction for every $2 in income over the limit |
| If you will reach your full retirement age in 2026 | $62,160 per year | $65,160 per year | $1 reduction for every $3 in income over the limit |
Data source: Social Security Administration.
For the most part, the benefit changes coming in 2026 will result in larger monthly payments. But there are still some long-term concerns about the future of Social Security that retirees should keep in mind.
Benefits may not go as far in the future
Despite annual COLAs, Social Security has struggled to keep pace with rising inflation. In fact, between 2010 and 2024, benefits lost around 20% of their purchasing power, according to a report from nonpartisan advocacy group The Senior Citizens League.
In addition to losing buying power, benefits could be slashed by close to 20% in the next decade. Social Security relies primarily on payroll taxes to fund benefits, but with that income falling short in recent years, the Social Security Administration has been pulling money from its two trust funds to continue paying benefits in full.
Those funds are expected to run out by 2034, however, at which point the program's income sources will be enough to cover only around 81% of scheduled benefits. In other words, not only are current benefits not going as far as they used to, but future benefits could also be slashed if lawmakers can't find a solution before 2034.
There may not be much retirees can do about potential benefit cuts or the loss of buying power, but it's still smart to stay updated on Social Security's future. By keeping realistic expectations about how far your benefits can go, it will be a little easier to manage your finances accordingly.
