Retirement Social Security

5 Social Security Changes That Could Affect Working Retirees in 2026

Here's what you need to know if you're still working while collecting benefits.

By David Maina

Edited by Andrea Basse

Updated Nov. 6, 2025

Millions of Americans keep working after they claim Social Security, either to stay active or to stretch their income. But in 2026, several rule changes could affect how much of their benefit they actually receive. These shifts could mean smaller checks for some and smoother adjustments for others, depending on how the new formulas play out.

Here's what's coming in 2026 and how to stay prepared to avoid wasting money in retirement.

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COLA for 2026 rises slightly to 2.8%

The 2026 Social Security cost-of-living adjustment (COLA) will be 2.8%, slightly higher than 2.5% in 2025. For the average retired worker, that's about $56 more per month, lifting the average check to $2,071. For married couples both receiving benefits, the average rises $88 to $3,208.

A higher COLA typically puts more money in checks, but it happens because inflation is still biting. In contrast, a lower COLA can signal easing prices, but it gives retirees less help with rising costs like medical care, housing, and utilities.

Even with the 2.8% boost, many retirees say their checks still don't stretch as far as they used to. A projected 11.6% jump in Medicare Part B premiums alone could eat up much of that $56 increase.

That's why it's smart to plan beyond the annual COLA. Building income from savings, investments, or part-time work can provide a cushion when benefit increases fall short.

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Full Retirement Age (FRA) climbs to 67

By law, the FRA is gradually rising to 67 for anyone born in 1960 or later. Here's when the new full retirement age applies by birth year:

People born in 1958 reach their FRA at 66 years and 6 months, starting in November 2024.
People born in 1959 reach their FRA at 66 years and 10 months, starting in November 2025.
People born in 1960 or later reach their FRA at 67, starting in November 2026 and continuing for everyone born after that.

A higher FRA means retirees must wait until 67 to receive their full benefit. Claiming early now carries a slightly larger cut than it once did. For example, filing at 66 instead of 67 trims your benefit by roughly 6.7%.

The good news is that delaying still pays off. You'll keep earning delayed retirement credits of about 8% per year (or two-thirds of 1% per month) for waiting beyond FRA, up to age 70.

Higher earnings test threshold

The earnings cap for people under full retirement age (FRA) rises in 2026. If you're under full retirement age (FRA) all year in 2026, you can earn $24,480 ($2,040 per month) before any withholding applies, up from $23,400 in 2025.

In the year you reach FRA, the higher limit is $65,160 ($5,430 per month). And once you reach full retirement age, the cap disappears entirely, and you can earn any amount without losing benefits.

While the higher cap offers some breathing room, it's still smart to plan your income timing. If possible, spread bonuses or extra earnings across years to avoid unnecessary withholdings.

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Higher taxable earnings and Medicare costs

In 2026, you'll pay Social Security tax on wages up to $184,500 (up from $176,100 in 2025). The rate is 6.2% for you and 6.2% for your employer. That puts the maximum employee OASDI (Old-Age, Survivors, and Disability Insurance) at $11,439 for the year, with your employer paying the same.

If you're self-employed, you pay 12.4% on net earnings up to the cap ($22,878 max). The new limit adds $8,400 of wages to the OASDI base, and for someone at or above the cap, that's about $521 more in employee tax for 2026.

Medicare taxes stay the same at 1.45% on all earnings, with no income cap. High earners still face the 0.9% surtax on wages above $200,000 for single filers and $250,000 for joint filers.

It's worth noting that these extra payments won't increase your benefit once you're already collecting Social Security. The change mainly affects take-home pay, and reminds higher earners that working in retirement still comes with a tax tab.

Digital ID verification and online services

Social Security is moving more services online. That's good news for speed, but it comes with stronger identity checks.

Since April 2025, and continuing through 2026, certain actions require you to verify your identity through your My Social Security account.

If you can pass the online check, you can handle many tasks from your phone or laptop in minutes. If you can't, you'll be asked to show ID at a local office before SSA processes your claim or change.

Previously, SSA held new banking details for about 30 days as a security buffer. Now, direct-deposit updates can go through in just one business day, making this improvement one retirees will notice right away. Faster processing can help if you switch jobs, change banks, or need to reroute your check mid-month.

Bottom line

Each year brings a little uncertainty for working retirees. The numbers shift, the rules change, and no one knows exactly how much they'll take home once the new Social Security updates roll out. Still, a few smart habits can make the difference between a stress-free retirement and a string of avoidable surprises.

For instance, you can track your work income so you don't blow past the earnings-test limits by accident. If you're close to the threshold, talk with your employer about the timing of bonuses, overtime, or vacation payouts so withholdings don't blindside you. You can also set up voluntary tax withholding (Form W-4V) or make quarterly tax payments if your income will push part of your Social Security into the taxable range.

No matter how small they seem, these steps can help you stay organized and keep more of what you've earned.

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