Hailey
Millions of Americans rely on Social Security benefits every month. In 2026, several major updates will affect retirees, disabled individuals, and workers.
From higher cost-of-living adjustments to new tax rules, these changes will impact both your income and deductions. Here’s a clear breakdown of what to expect in 2026.
Cost-of-Living Adjustment (COLA)
The COLA is designed to help retirees and beneficiaries keep up with inflation. In 2026, benefits will rise by 2.8 %, slightly higher than the 2.5 % increase in 2025.
This means the average monthly benefit will go from $2,015 to $2,071, an increase of about $56 per month starting January 2026.
This adjustment also applies to SSI, SSDI, survivor, and family benefits. However, surveys show that many seniors believe even a 3 % increase isn’t enough to cover growing prices for essentials like food and housing.
Medicare Premiums Increase
Most Social Security recipients have their Medicare Part B premiums deducted directly from their payments. Starting in 2026, the standard premium is expected to rise from $185 to $206.50—an 11.6 % jump. This increase will slightly reduce the benefit boost from the COLA, meaning retirees will take home a smaller net gain.
Social Security Taxes on Income
If you work, you pay Social Security taxes that fund the program. The rate remains the same—6.2 % for employees and another 6.2 % paid by employers (12.4 % total). But the income limit subject to tax will increase from $176,100 in 2025 to $184,500 in 2026.
If you earn above this limit, that portion of your income won’t be taxed for Social Security. Income from investments or savings withdrawals also doesn’t count toward this tax.
New Tax Deduction for Older Adults
Starting in 2026, people aged 65 and older can benefit from a new $6,000 deduction to lower or eliminate federal income taxes on their Social Security benefits.
Single filers with incomes up to $75,000, or married couples earning up to $150,000, qualify for the full deduction. Partial deductions apply for higher incomes—up to $175,000 for singles and $250,000 for couples.
While this rule offers relief, it could also reduce the trust fund’s reserves and slightly shorten the program’s long-term solvency.
Earnings Test for Early Beneficiaries
If you start receiving benefits before your full retirement age (FRA)—between 66 and 67—and continue working, your benefits may be temporarily reduced. In 2026, the earnings limit rises to $24,480, up from $23,400 in 2025.
For every $2 you earn above that limit, Social Security will withhold $1 from your payments.
In the year you reach FRA, the higher limit of $65,160 applies, and only $1 is withheld for every $3 above the threshold.
Once you hit your FRA, the rule ends, and your benefit amount is adjusted upward to recover withheld payments.
For those on SSDI, the limit for “substantial gainful activity” increases to $1,690 per month, or $2,830 for beneficiaries who are blind.
Qualifying for Social Security Benefits
To qualify for retirement benefits, you must earn 40 credits, typically over 10 years of work. In 2026, one credit will be earned for every $1,890 in income—up $80 from 2025.
You can earn up to four credits per year, meaning you’ll qualify after earning $7,560 during 2026. These credits are essential to establish eligibility for future retirement payments.
Summary
| Category | 2025 | 2026 |
|---|---|---|
| COLA Increase | 2.5 % | 2.8 % |
| Average Monthly Benefit | $2,015 | $2,071 |
| Medicare Part B Premium | $185 | $206.50 |
| Taxable Income Cap | $176,100 | $184,500 |
| Earnings Limit (Before FRA) | $23,400 | $24,480 |
| Income per Credit | $1,810 | $1,890 |
The 2026 Social Security updates bring a mix of good and bad news. Benefits are increasing slightly, but so are taxes and healthcare premiums.
For many retirees, these changes mean careful budgeting is more important than ever. Staying aware of new income limits, deductions, and eligibility rules can help you plan smarter and make the most of your benefits in 2026.
FAQs
What is the 2026 COLA increase?
It’s a 2.8 % rise in benefits to help offset inflation, starting from January 2026.
How much will Medicare premiums increase?
The standard Part B premium is expected to rise from $185 to $206.50 per month.
How many credits are needed for retirement benefits?
You need 40 credits, which usually means about 10 years of work with Social Security taxes paid.