Millions of Americans who depend on Social Security will see several big changes in 2026. From a higher cost-of-living adjustment (COLA) to increased Medicare premiums and new tax breaks, the upcoming year will bring both relief and challenges.
More than 70 million beneficiaries and 185 million workers contributing to Social Security will feel the impact. Let’s break down the six biggest Social Security changes for 2026 and what they mean for you.
Bigger Cost-of-Living Adjustment (COLA)
The Social Security Administration (SSA) has announced a 2.8% COLA increase for 2026, up from 2.5% in 2025. This adjustment helps retirees and SSI recipients keep up with rising prices caused by inflation.
| Year | COLA Percentage | Average Monthly Benefit |
|---|---|---|
| 2025 | 2.5% | $2,015 |
| 2026 | 2.8% | $2,071 |
That’s an average increase of $56 per month starting January 2026. SSI beneficiaries will see their new payment on December 31, 2025. Despite the boost, surveys show that nearly 77% of seniors feel a 3% raise still isn’t enough to handle inflation.
Medicare Premiums Are Rising
The standard Medicare Part B premium—which covers doctor visits and outpatient care—will increase by 11.6%, going from $185 to $206.50 per month. The final rate will be confirmed later this year.
Since most seniors have their Medicare premiums deducted directly from Social Security payments, this rise will partially reduce the benefits gained from the COLA, cutting about $21.50 monthly from the increase.
Higher Social Security Taxable Earnings
Workers will pay Social Security taxes on a larger portion of their income in 2026. The taxable earnings limit will rise to $184,500, up from $176,100 in 2025.
| Year | Maximum Taxable Income | Tax Rate |
|---|---|---|
| 2025 | $176,100 | 6.2% (employee) / 12.4% (self-employed) |
| 2026 | $184,500 | Same rates apply |
Income above these limits won’t be taxed for Social Security. The tax rate itself remains unchanged at 6.2% for employees and 12.4% for self-employed workers.
New Tax Break for Seniors
A new federal tax deduction will help millions of older Americans in 2026. Seniors aged 65 and older can deduct up to $6,000 from their taxable income under the new rule included in the “One Big Beautiful Bill” passed by Congress.
| Filing Status | Income Limit (Full Deduction) | Deduction Amount |
|---|---|---|
| Single | Up to $75,000 | $6,000 |
| Married (Joint) | Up to $150,000 | $6,000 |
Those earning up to $175,000 (single) or $250,000 (joint) can claim a reduced deduction. However, this change may shorten the Social Security trust fund’s life by about six months.
Adjusted Social Security Earnings Test
If you claim benefits before reaching Full Retirement Age (FRA) and continue working, some of your payments may be temporarily withheld. In 2026, for every $2 earned above $24,480, $1 will be withheld.
Once you reach FRA, the rule relaxes—you’ll only lose $1 for every $3 earned over $65,160, and after reaching FRA, you’ll receive full benefits with adjustments for previous deductions.
For disability beneficiaries (SSDI), the substantial gainful activity limit will rise to $1,690 per month ($2,830 for blind individuals).
Updated Qualification Credit Requirements
To qualify for Social Security retirement benefits, you need 40 work credits, which most people earn after about 10 years of work.
In 2026, each credit will be earned for $1,890 in income, up from $1,810 in 2025. That means you’ll reach the maximum of four credits once you earn $7,560 in a year.
The Social Security changes for 2026 will influence nearly every retiree and worker in the U.S. While COLA and tax deductions offer much-needed support, rising Medicare costs and tax adjustments remind us that retirement planning is more important than ever.
Understanding these updates will help you prepare financially and make smart decisions about your benefits and taxes in 2026.
FAQs
When will the new Social Security COLA take effect?
The 2.8% COLA increase begins in January 2026. However, SSI recipients will see their first adjusted payment on December 31, 2025.
How much will Medicare premiums increase in 2026?
The Medicare Part B premium will rise by 11.6%, from $185 to $206.50 per month.
What is the new taxable earnings cap for Social Security?
The maximum taxable income for 2026 will be $184,500, meaning any income beyond that won’t be taxed for Social Security.