Every October, the Social Security Administration (SSA) announces changes and modifications to its system that impact millions of Americans.
This year’s announcement includes five major updates that impact not only the roughly 70 million current beneficiaries but also those who will soon get their first checks as well as the more than 185 million workers who pay into the system every year (1).
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From the highly anticipated cost-of-living adjustment (COLA) to the earning limits for retirees, here are the top five changes that go into effect January 2026.
1. COLA bump
The benefit paycheck is getting a 2.8% bump starting next year, according to the SSA (2). That’s larger than the previous hike of 2.5% for 2025.
This might sound like good news, but it’s actually a reflection of the persistent cost-of-living crisis. The COLA (cost of living adjustment) is designed to offset the impact of inflation, and a larger adjustment next year implies that inflation is rising.
It’s also worth noting that the COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is a measure of average prices. This adjustment may not fully offset the rising costs in your personal budget. For instance, the cost of home heating is expected to be 7.6% higher this winter (3), according to the National Energy Assistance Directors Association (NEADA), which means seniors may see their budgets squeezed despite the COLA.
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2. Higher wage cap
High-income earners may already be aware of the Social Security wage cap. In 2025, the cap was set at $176,100, which means any earnings above that threshold are not subject to Social Security contributions. In 2026, this cap is being raised to $184,500 (4).
This change impacts only a small cohort of high-income earners. But if you’re close to the threshold, you may see your contributions rise in 2026.
Get clarity on what these changes mean for you with professional advice
As these income thresholds shift, it becomes even more crucial to understand how your earnings, benefits, and long-term plans fit together. That’s where professional guidance can make a meaningful difference.
If you’re unsure how these Social Security changes fit into your own retirement roadmap, Advisor.com makes it easy to connect with licensed financial advisors who can offer personalized guidance.
A professional fiduciary advisor is required to act in your best interest. They can help you understand how many years you have left to invest, how much you should be contributing and whether your current portfolio aligns with your risk tolerance.
With Advisor.com, you can schedule a free, no-obligation consultation to walk through your goals and build a plan that works for your retirement timeline.
3. Higher Medicare premiums
In 2026, you’re likely to pay more for Medicare Part B, which covers doctor visits and other outpatient treatment. The monthly premium for this segment of the program is set to rise from $185 to $206.50, in January, which is 11.6% higher than this year’s premiums.
Higher income beneficiaries are likely to see a boost in the Income-Related Monthly Related Monthly Adjustment Amount (IRMAA) as well. Depending on your income, the monthly amount could be $83 to nearly $496 higher, according to Mercer Advisors (5).
This rise in Medicare premiums could offset some of the COLA you enjoy next year.
4. Earnings test
Many retirees may be aware that they can work while receiving benefits. However, if your income is too high before you reach full retirement age (FRA), you may have some of your benefits withheld.
In 2026, the income threshold rises from $23,400 in 2025 to $24,480. As AARP explains, for every $2 you earn beyond this threshold, $1 in benefits is withheld (1). The earnings test is a little more relaxed for the year you reach FRA. In 2026, this specific threshold is set at $65,160 (up from $62,160 in 2025) until the month when you hit the milestone.
After FRA, your income is no longer subject to any test or withholding.
Simply put, for people working part-time or casual gigs while receiving benefits, these changes add a little more breathing room.
5. Qualifying for Social Security
A common misconception is that anyone who pays Social Security contributions automatically qualifies for benefits later in life. However, this isn’t exactly how the system works.
Instead, the system has a qualifying mechanism based on the amount of Social Security credits you have accumulated. You need at least 40 credits to qualify for benefits. In 2026, you need to earn at least $1,890 in a given quarter to earn one credit (6). That is $80 more than the 2025 level.
In general, these thresholds are low enough that an average worker could expect to hit the qualifying rate within roughly 10 years of full-time work. However, some workers may fail to qualify because of special circumstances, such as leaving the workforce early to focus on child care or being self-employed with limited profits.
Nevertheless, even if you retire without the required credits you could easily accumulate them with some part-time work for a few years.
Whether you’re retired or approaching retirement, these five major changes to Social Security should be on your radar as you adjust your own financial plans and budget.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
AARP (1); Social Security Administration (2), (4), (6); CBS News (3); Mercer Advisors (5)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.