One thing that's always consistent with Social Security is change. The program is constantly evolving and making changes that affect both current recipients and workers who may or may not be approaching retirement in the coming years. People may not be a fan of the constant changes, but they're a reality for the program.
The annual cost-of-living adjustment (COLA) gets most of the attention because it involves increased monthly benefits, but there are a few other lesser-known changes to be aware of. One of these changes will result in some people paying more out of pocket, while the other could help people save money.
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One change that could take money out of your pocket
The Social Security program is primarily funded through Social Security payroll taxes. The current tax is 12.4%, with employers and employees each paying 6.2%. If you're self-employed or an independent contractor, you're responsible for the full 12.4%.
The good news for high earners is that not all income is subject to the Social Security payroll tax -- only up to a certain amount, called the wage base limit. In 2026, the wage base limit is $184,500, up from $176,100 in 2025. The bad news is that an increased wage base limit means some workers will pay more in Social Security payroll taxes, as more of their income falls below the wage base limit.
For example, let's imagine someone earned $180,000 in 2025. This means $3,900 of that would have been exempt from the tax. If they were to earn $180,000 in 2026, all of it would be subject to the tax. If they had an employer, that could mean an extra $241.80 in taxes (6.2% of $3,900). If they were self-employed, that would mean an extra $483.60 (12.4% of $3,900).
The wage base limit changes annually (with a few exceptions) based on changes to the national average wage index, which tracks changes in American workers' wages. So, if your earnings are around the range, it's helpful to keep track of the wage base limit so you're not caught off guard with a higher tax bill.
One change that could keep money in your pocket
It's not uncommon for someone to claim Social Security and continue earning income in various ways. However, if you're claiming Social Security before your full retirement age (about 67 for most Americans), you need to monitor how much you make, or you could be subject to the Social Security retirement earnings test (RET).
If you won't reach your full retirement age in 2026, the earnings limit is $24,480, up from $23,400 in 2025. Earning above that amount will reduce your benefits by $1 for every $2 you earn above that amount. For example, if you were to earn $8,000 above the limit, your benefits would be reduced by $4,000.
If you hit your full retirement age in 2026, the limit is $65,160, up from $62,160 in 2025. Earning above that amount will reduce your benefits by $1 for every $3 over. In this case, if you earned $6,000 over, your benefits would be reduced by $2,000.
This change could keep more money in your pockets because you can now earn more while claiming benefits early, without being subject to the Social Security RET.
There are two things worth noting about the RET. First, only earned income is counted, including paychecks, tips, commissions, and bonuses. Income from sources like retirement account withdrawals, dividends, or pension payments isn't included in the calculations. Second, withheld benefits aren't permanently lost, just deferred. Once you reach full retirement age, your monthly benefit is recalculated in a way that gradually returns the withheld amount over the remainder of your lifetime.
