AARP Hearing Center
Key takeaways
- The 2026 cost-of-living adjustment (COLA) boosts Social Security income by 2.8 percent.
- A higher “earnings test” means people who take Social Security early can earn more from work with less benefit withholding.
- More income is subject to payroll taxes, supporting Social Security’s sustainability.
Summary
Social Security changes in 2026 will directly affect your retirement income, and it’s crucial to know what’s ahead. Key updates include a 2.8 percent COLA for Social Security benefits, helping monthly payments better keep up with inflation. This means about $56 more per month for the average retiree — but higher Medicare Part B premiums may offset part of the increase.
For older adults who claim Social Security before reaching full retirement age but continue to work, the retirement earnings limit is increasing, allowing them to earn more before any benefits are temporarily withheld.
And as Nancy LeaMond, AARP’s chief advocacy and engagement officer, explains, the maximum taxable earnings level — the cap on how much work income is taxed to pay for Social Security — goes up to $184,500 in 2026, helping sustain the program for future generations.
Understanding these Social Security updates empowers you to plan your finances confidently, maximize your retirement benefits and secure a more stable future. To stay informed about these important changes, visit AARP.org/socialsecurity.
The key takeaways and summary were created with the assistance of generative AI. An AARP editor reviewed and refined the content for accuracy and clarity.
Full Transcript:
[00:00:00] Your Social Security is going to look a little different this year. Here are 3
changes you should understand.
[00:00:06] First is the cost-of-living adjustment, or COLA, that helps make sure your
retirement income keeps up with inflation.
[00:00:14] Social Security payments increase this year by 2.8%. For the average retired
worker, that means about $56 more a month or around
[00:00:24] $672 more a year. But some of that increase may be offset by rising
[00:00:31] Medicare Part B premiums, which for most people over age 65, are automatically
[00:00:37] deducted from their Social Security. The standard Medicare Part B premium
increased by about $21 per month, so
[00:00:46] your monthly Social Security may not have gone up by the full COLA amount.
Instead, it will be the COLA minus around $21.
[00:00:56] Second. There’s a change to something called the retirement earnings test. That’s
the calculation Social Security uses to temporarily reduce benefits if
[00:01:07] you start collecting before your full retirement age and are still working. If you
earn more than a certain amount,
[00:01:14] Social Security deducts $1 in benefits for every $2 you earn over the limit.
[00:01:21] So in 2026, that limit has gone up by $1,080 to around $24,480.
[00:01:30] Remember, you don’t lose this money forever. You’ll get it back in the form of
higher monthly benefits after you
[00:01:37] reach your full retirement age. And once you reach your full retirement age, the
retirement
[00:01:42] earnings test goes away. At that point, there are no limits and no deductions.
[00:01:48] The third change is to something called maximum taxable earnings. This affects
how much of your income goes into Social Security while you’re working.
[00:01:58] Most of us pay into the program through a tax on our earnings, but there’s a cap
on how much of those earnings are taxed.
[00:02:06] That’s the taxable maximum. In 2026, it increased by $8,400 to $184,500.
[00:02:17] Once you’ve earned that amount, you stop paying Social Security taxes for the
rest of the year. This increase brings more revenue into the system to help keep Social
[00:02:27] Security funded now and into the future. The bottom line of these changes: If
you’re collecting Social
[00:02:34] Security, you’ll see a modest increase in your monthly payment. If you’re getting
Social Security while still working before your full
[00:02:41] retirement age, you can earn more before any benefits are withheld. And higher
income workers will be paying into Social Security
[00:02:50] on more of their annual earnings. These adjustments help Social Security keep
pace with the economy while
[00:02:57] staying sustainable for future retirees. To learn more about your Social Security,
visit AARP dot org slash social security.
