Retirement Social Security

You Have Less Than 3 Weeks to Prepare for 5 Big Social Security Changes

Update your budget before 2026 Social Security rules shift.

By Katy Willis

Edited by Laura Hohenstein

Updated Dec. 15, 2025

You have less than three weeks before your January Social Security deposit hits your account. That check will likely look different than it did in 2025, even if you didn't change a thing. Between a cost-of-living adjustment increase, higher Medicare costs, new work limits, and updated rules for disability and SSI, your net deposit could move down just as easily as up.

The changes are automatic. Your benefit amounts, earnings limits, and payroll taxes reset on their own. But how you budget, work, and handle your accounts is on you. A little prep now can prevent nasty surprises and bad money moves that could derail your retirement plan.

Learn 7 ways to generate income with a $1,000,000 portfolio

Learn the strategies wealthy retirees use to fund their retirement with $1,000,000 — and how you can, too — with this new guide: The Definitive Guide to Retirement Income from Fisher Investments.

Fisher Investments has helped tens of thousands of investors retire comfortably since 1979. With over $332 billion under management, they provide tailored money management to help achieve long-term goals.

Get your guide here

Your Social Security check is getting a 2.8% raise

For 2026, there's a 2.8% cost-of-living adjustment (COLA) for both Social Security and Supplemental Security Income. That increase is based on inflation data and starts with benefits paid in January 2026. The average retired worker's monthly benefit goes from $2,015 to $2,071, which is about a $56 gross increase.

The raise applies to your December benefit, which is the check you actually receive in January. If you get SSI, the higher amount shows up a little earlier, on December 31, 2025.

Log in to your "my Social Security" account and look for your COLA notice. It'll show you your new gross benefit and any deductions for Medicare and tax withholding, plus the exact net amount hitting your bank. Use these next few weeks to update your budget, automatic bill payments, and any other costs that are tied to your deposit so you're not guessing and fumbling when the new amount kicks in.

Who really has the cheapest auto insurance in your area? Check your zip code here.

Medicare premiums are going up

Most retirees never see their full gross benefit amount because Medicare Part B premiums come out first. In 2026, the standard Part B premium rises from $185 to $202.90 per month. This increase alone eats around $18, or about a third of the average COLA increase. The annual Part B deductible also moves from $257 to $283.

If you have a higher income, you may also pay extra income-related monthly adjustment amount (IRMAA) surcharges for Parts B and D, which are taken straight from your check as well. This means a big chunk of your COLA increase can disappear into health costs before it ever reaches your bank.

Check your COLA notice to check how much you're paying in Medicare premiums. If it's more than you expect, check whether you qualify for a Medicare Savings Program. With IRMAA surcharges, they're based on earnings from two years ago, so if you've had a significant life event that's resulted in drastically reduced income, you may be able to request a reduction or removal of those charges.

You can earn more before the earnings test kicks in

If you're under full retirement age and working while collecting benefits, the retirement earnings test can temporarily reduce your monthly checks. In 2026, you can earn up to $24,480 for the year before withholding kicks in.

Above that, the Social Security Administration (SSA) automatically holds back $1 from your Social Security benefit for every $2 that you earn. If you reach full retirement age (FRA) in 2026, you can earn up to $65,160 before SSA withholding begins, with $1 withheld for every $3 earned. The earnings test stops at the start of the month you reach your FRA.

Your money isn't gone forever. SSA readjusts your benefit amount to credit you for withholding once you reach full retirement age. But the temporary loss can come as a shock if you're not prepared for it.

So plan ahead. If you haven't claimed yet, look at your expected income to see if you'll cross those earning thresholds, and if it might make more sense to wait before you file. If you already filed, readjust your budget to compensate if you think you'll be subjected to the earnings test.

Get a protection plan on all your appliances

Did you know if your air conditioner stops working, your homeowner’s insurance won’t cover it? Same with plumbing, electrical issues, appliances, and more.

Whether or not you’re a new homeowner, a home warranty from Choice Home Warranty could pick up the slack where insurance falls short and protect you against surprise expenses. If a covered system in your home breaks, you can call their hotline 24/7 to get it repaired.

For a limited time, you can get your first month free with a Single Payment home warranty plan.

Get a free quote

More of your paycheck will be taxed for Social Security

If you're still working, more of your earnings will be subject to Social Security payroll tax in 2026. The new cap is $184,500, a jump from $176,100 in 2025. Any amount earned up to this cap is subject to 6.2% tax if you're a worker, and 12.4% tax if you're self-employed.

For high-income workers at or above the cap, that's around $521 more you'll pay in Social Security tax. For those self-employed, you'll pay around $1,042 more.

Before January, take a look at your paycheck estimates and quarterly tax plan. If you're close to that higher cap, adjust your budget and consider increasing voluntary withholding so you don't get a surprise bill at tax time.

Retirement News: Almost 80% of Americans fear a retirement age increase — here’s the real reason why

You need more covered wages to earn Social Security credits

This change only matters if you haven't filed yet and don't have the full 40 credits needed to claim retirement benefits. You can earn four credits per year, but from January 1, 2026, you need to receive $1,890 in covered earnings to get one credit.

To get the full four credits available in 2026, you'll need to earn $7,560 in covered income. For most people, 40 credits is achievable as it's only 10 years of work. However, people who work seasonally, in the gig economy, or in part-time employment could be short.

Check your Social Security account to see how many credits you have. If you're short, work out the most efficient way of earning those credits so you qualify for your future benefit. Just remember, you can only earn four per year, regardless of how much money you make.

Get instant access to hundreds of discounts

Over 50? Join AARP today— because if you’re not a member you could be missing out on huge perks like discounts on travel, dining, and even prescriptions.

Get 25% off membership — just $15 for your first year with auto-renewal — and a free gift if you join today.

Become an AARP member now

Bottom line

You can't stop the 2026 Social Security changes, but you can be ready for them. The taxable wage base, COLA, and earnings limits will all change automatically on January 1, 2026.

In the next couple of weeks, take a good look at your retirement plan and your budget. Check your "my Social Security" account for your COLA notice, make sure your earnings record is accurate, and that you know just how much your net deposit will be after deductions.

Having the full picture helps you decide when to file for Social Security and work out how to make your senior benefits stretch further.

More from FinanceBuzz: