Hailey
If you receive Social Security or plan to retire soon, there’s good news on the horizon. The Social Security Administration has announced two major updates for 2026 that could help you earn more and keep more of your monthly benefits.
These include a higher cost-of-living adjustment (COLA) and increased income limits for people who work while receiving benefits. Together, these changes could bring more money into retirees’ pockets and greater flexibility for workers.
Higher Earnings Limits for Working Retirees
The second big change is good news for retirees who still choose to work. Social Security sets an annual earnings limit for people who collect benefits before reaching their full retirement age (FRA). If your income goes over this limit, part of your Social Security benefit is temporarily withheld.
In 2026, both earnings limits will increase, giving retirees more room to earn without losing part of their benefits.
| Category | 2025 Income Limit | 2026 Income Limit | Benefit Reduction |
|---|---|---|---|
| Under full retirement age in 2026 | $23,400 | $24,480 | $1 reduced for every $2 earned over the limit |
| Reaching full retirement age in 2026 | $62,160 | $65,160 | $1 reduced for every $3 earned over the limit |
This means retirees can earn more money while working before facing any benefit reductions. For those nearing retirement age, this change provides greater flexibility to stay employed without losing too much of their Social Security income.
The best part is that these withholdings are not permanent—once you reach full retirement age, Social Security will adjust your benefits to return the withheld amount over time.
Higher Maximum Benefit in 2026
For people who haven’t yet started collecting Social Security, the maximum benefit amount will also increase in 2026. The highest possible monthly payment will rise to $5,251, up from $5,108 in 2025.
Reaching the maximum benefit isn’t easy, but it’s possible if you meet a few key requirements:
- Work at least 35 years: Social Security calculates your benefit using your highest 35 years of income. If you worked fewer than 35 years, the missing years count as zero, lowering your average and your benefit.
- Delay your claim until age 70: Waiting beyond full retirement age increases your benefit each year you delay, up to age 70.
- Reach the maximum taxable earnings limit: This is the highest annual income subject to Social Security taxes. It will increase to $184,500 in 2026, up from $176,100 in 2025. Workers who consistently reach or exceed this limit earn the largest possible benefits.
Even if you don’t meet all these conditions, getting close to them can still improve your retirement income significantly.
What These Changes Mean for You
The 2026 updates are designed to make Social Security stronger and more flexible. The higher COLA will help protect retirees from rising prices, while increased earning limits and higher benefit caps make it easier for workers to continue earning income without penalty.
For many older Americans, these updates could mean more financial comfort and the ability to better plan for the future. Even small monthly increases can add up to a meaningful difference over time, especially for those living on a fixed income.
Social Security will look a little brighter in 2026, thanks to these two positive changes. A 2.8% cost-of-living raise and higher income limits mean retirees can expect larger checks and greater financial freedom.
Although the increases may seem small, they are steps in the right direction—helping millions of Americans keep up with inflation and live with more stability during retirement.
Whether you’re already collecting benefits or preparing to, staying aware of these updates can help you make smarter financial decisions for the years ahead.
FAQs
How much more money will retirees get from the COLA increase?
The average retiree will receive about $56 more each month, which equals roughly $672 more per year.
When will the new Social Security changes take effect?
The new COLA and income limits will begin in January 2026, affecting all eligible Social Security recipients.
Can I still work and receive Social Security benefits?
Yes. In 2026, you can earn up to $24,480 if you are under full retirement age before your benefits are reduced. Once you reach your full retirement age, you can earn any amount without reductions.