Retirement Social Security

3 Giant Social Security Changes Taking Effect in January 2026

Three January updates will affect benefits, taxes, and working retirees

By David Maina

Edited by Laura Hohenstein

Updated Dec. 23, 2025

January 2026 brings a new round of Social Security changes, and they carry more weight than they first appear.

The 2.8% cost-of-living adjustment (COLA) will be the most noticeable update for many people. Less visible, but just as important, are several other changes taking effect at the same time, quietly shaping paychecks, taxes, and future benefits.

Below, we break down what's changing and why it matters if you want to maximize your senior benefits.

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The earnings limit rises for people collecting and still working

The Social Security earnings test applies if you claim benefits before reaching full retirement age (FRA), which is between 66 and 67, and continue working. It limits how much you can earn from a job before Social Security temporarily withholds part of your benefit.

This isn't a permanent penalty, though. Any benefits withheld because of the earnings test are later credited back once you reach FRA.

In 2026, the limits rise, which gives working retirees a bit more breathing room.

If you are under full retirement age for all of 2026, you can earn up to $24,480 per year (about $2,040 per month) before any benefits are withheld, up from $23,400 in 2025. If you earn more than $24,480, Social Security withholds $1 in benefits for every $2 earned above the limit.

If you reach full retirement age during 2026, a higher limit applies for the months before your birthday. You can earn up to $65,160 (up from $62,160 in 2025). Above that amount, Social Security withholds $1 for every $3 earned over the limit.

Once you reach full retirement age, the earnings test ends completely. From that point on, you can earn as much as you want without any reduction in your Social Security benefits.

If you plan to work while collecting benefits in 2026, estimate your earnings now. A small raise in the limit can help, but crossing it unexpectedly can still disrupt your monthly income.

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The highest possible Social Security payment climbs again

Social Security benefits are based on your lifetime earnings, but there's a ceiling on how large a monthly check can be.

For high earners who paid the maximum Social Security tax for most of their careers, 2026 brings a higher top-end benefit:

At full retirement age in 2026, the maximum monthly benefit rises to $4,152, up from $4,018 in 2025.
For those who delay claiming until age 70, the maximum benefit reaches about $5,251 per month, compared with $5,108 in 2025.

To get the maximum benefit, you generally need 35 years of earnings at or above the taxable maximum, which most workers don't reach consistently. If your earnings were lower or your career shorter, your benefit will be proportionally smaller.

Even so, the higher maximum reflects rising wage levels across the system, and everyone still benefits from the annual COLA.

It's wise to review your Social Security earnings record and benefit estimates through the SSA. Checking for errors and understanding your projected benefit at full retirement age, or at age 70, can help you plan more confidently, regardless of where you land relative to the maximum.

More income will be subject to Social Security tax next year

Each year, the Social Security Administration sets a maximum taxable earnings limit, also known as the wage base. Income above that cap isn't subject to Social Security tax and doesn't count toward future benefits.

In 2025, the first $176,100 of wages were subject to Social Security tax. In 2026, that cap rises to $184,500.

This means:

Employees will pay the 6.2% Social Security tax on earnings up to $184,500
Employers match that 6.2%
Any income above $184,500 is not taxed for Social Security

The increase reflects national wage growth, which is why the cap can jump more in years when incomes rise faster.

If you're self-employed, this change matters more. You're responsible for both the employee and employer portions of the tax (12.4% total). With the higher cap, that can mean paying up to about $1,000 more in Social Security taxes over the year. It's worth factoring this into your 2026 estimated tax payments to avoid surprises.

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Bottom line

As 2025 comes to a close, now is a good time to pause and get your bearings. Take a fresh look at your earnings and how the new Social Security limits apply to your situation. If something needs adjusting, it's easier to do it now than after the year turns.

That could mean checking whether you're close to the higher taxable earnings cap, or simply confirming that your benefit amount and withholding still make sense based on how this year played out.

The year may be winding down, but the window to prepare is still open, and the retirees who start early are the ones best positioned to make the right moves as 2026 approaches.

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