The Social Security Administration revealed several major changes that will affect most Social Security recipients next year. Social Security and Supplemental Security Income benefit 72.5 million Americans currently. The number is expected to go up by 2.5 in 2026.
It is important for all beneficiaries to stay well-informed and aware of the changes to avoid disruptions in Social Security payments. Here are the top three changes regarding Social Security payments that everyone should keep in mind.
Cost of living adjustment for 2026
The cost-of-living adjustment is an increase in Social Security and SSI payments observed to keep up with the increasing cost of living caused due to inflation. The COLA is projected to be a little higher than its previous year. The COLA for 2025 was set at 2.5%.
As per USA Today, COLA could go up to 2.7%. A rise in inflation will likely trigger a cost-of-living adjustment. This will result in retirees’ social security paychecks being increased by a small amount.
When the COLA is low, it means the inflationary pressure is lower. This would result in lower social security benefits, leaving retirees with less money to use to keep up with rising costs of living.
Shannon Benton, who serves as the Executive Director of The Senior Citizens League, gave an insight into the COLA. She noted how the COLA announcement being around the corner is making seniors hold their breath.
“While a higher COLA would be welcome because their monthly benefits will increase, many will be disappointed,” she added. Benton also noted how TSCL’s research shows that the COLA does “not adequately capture the inflation they experience.”
Change in full retirement age
The full retirement age for retirees will go up starting in November 2025. The eligible age for redeeming your full Social Security benefits for people born in 1959 is about to go up to 66 years and 10 months.
For the year 2026, the full retirement age will be 67 years for people born in 1960 and years after that. For individuals born in 1960 or later, the FRA will be 67 from 2026. For individuals born in 1959, the FRA is 66 and 10 months and reached in 2025.
The full retirement age (FRA) for Social Security benefits is increasing in 2025 for those born in 1959, moving from 66 to 66 and 10 months. For those born in 1960 or later, the FRA will be 67. This is part of a gradual increase enacted in 1983 to address increasing life… pic.twitter.com/JcluRbbKbQ
— Doni 🏴 (@DoniTheMisfit) June 19, 2025
A retiree who starts collecting their Social Security benefits as soon as they turn 62 will receive lower benefits. Somebody who waits to reach the full retirement age to collect their Social Security will be able to receive the highest possible benefits, as per the official SSA website.
Wage cap for Social Security set to increase
The Social Security tax limit will increase in the year 2026. The tax limit for 2025 is $176,100, up $7,500 from $168,600 in 2024. Inflation plays an important role in deciding the tax limit that is imposed. The tax limit is projected to increase in 2026, considering the rising inflation.
The max earnings subject to Social Security tax increases to $160,200 in 2023. BFD.
People who earn $1 mill/year STOP paying into Social Sec. w/in the first 2 mo.of the year😳
The burden of paying for Social Security falls on us who earn the least.
Raise the cap.#FreshWords
— Marla (@marla_vous) December 9, 2022
According to a report from the 2025 Social Security Board of Trustees, the maximum taxable earnings limit will be $183,600 for next year. The limit is $7,500 more than the 2025 limit of $176,100.
