Millions of older Americans rely on Social Security each month to help cover their living expenses, even if they have personal savings set aside for retirement. Changes to Social Security happen every year, and some of these updates can have a real impact on your budget and financial security. In 2026, two key changes are on the way that could put more money in your pocket, making retirement a bit more comfortable.
The first change is a higher cost-of-living adjustment (COLA), meaning retirees can expect their monthly Social Security checks to increase slightly to match inflation. This bump will help seniors keep up with rising prices, ensuring their purchasing power isn’t eroded by inflation. The second change is a rise in the earnings-test limit, which will give working retirees more flexibility to earn extra income without losing as much from their Social Security checks.
Whether you’re already receiving benefits or just planning ahead, these updates make Social Security more valuable and forgiving for a wide range of people. Understanding how these rules work will help you make better decisions and take full advantage of your retirement resources.
What’s Changing in 2026? Cost-of-Living Adjustment (COLA) Gets Bigger
Starting in 2026, Social Security recipients will see a 2.8% increase in their monthly payments as a cost-of-living adjustment. This yearly boost is designed to help seniors keep up with rising costs caused by inflation. For example, in 2025, the adjustment was only 2.5%, so this year’s increase is a bit more generous.
While a 2.8% raise may not be the biggest ever seen, it’s still a positive step forward. There have been years when no adjustment was made, so even a small increase matters when it comes to staying financially secure. If inflation had been higher, the adjustment would be larger, but it would also mean living costs had gone up more sharply. So this COLA is a sign that things are stabilizing a bit, which is good news for retirees.
Higher Earnings-Test Limit Means More Flexibility
Many seniors continue to work after retirement, sometimes for social reasons, but often because they need extra money. If you work while under full retirement age and collect Social Security, you’re subject to an earnings-test limit: if you earn more than that limit, some of your benefits are withheld.
In 2026, the earnings-test limit will rise from $23,400 to $24,480 for those under full retirement age throughout the year. Any earnings above $24,480 will lead to $1 of Social Security withheld for every $2 earned. For people reaching full retirement age in 2026, the threshold increases from $62,160 to $65,160, and they will have $1 withheld for every $3 earned over the limit.
This change lets retirees earn a little more before seeing their benefits reduced. Remember, money withheld under this rule isn’t lost forever—it’s added back to your benefit once you reach full retirement age.
Why These Changes Matter
- Easier to keep up with inflationary costs in retirement.
- More flexibility for working seniors to take jobs and earn money without immediately losing Social Security benefits.
- Adjustments can improve financial well-being and make retirement planning more effective for millions of Americans.
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Key Social Security Changes for 2026
| Change | 2025 Amount | 2026 Amount | What It Means for Retirees |
|---|---|---|---|
| Cost-of-Living Adjustment (COLA) | 2.5% | 2.8% | Bigger monthly checks |
| Earnings-Test Limit (Under FRA) | $23,400 | $24,480 | Earn more before benefits are withheld |
| Earnings-Test Limit (Reaching FRA) | $62,160 | $65,160 | More flexibility with income near retirement |
Change Can Be Good
It’s natural to worry when benefits programs update their rules. In this case, though, both COLA and earnings-test changes in Social Security for 2026 mean less stress and more options for retirees. Stay informed about these updates and others that could affect your financial future. And whenever you have questions about Social Security, check official resources and trusted financial advice to guide your decisions.
