Projected 2026 Cost-of-Living Adjustment (COLA)
Each year, Social Security benefits are adjusted based on inflation. The official COLA for 2026, calculated using the CPI-W, is expected to be announced on October 15, 2025. Current projections suggest a 2026 COLA of approximately 2.7%.
A 2.7% COLA could mean an increase of about $54 per month for an average retired worker. However, increases in Medicare Part B premiums, which are often deducted from Social Security checks, may offset a significant portion of this COLA for many retirees.
Full Retirement Age Reaches 67
The full retirement age (FRA), the age for receiving 100% of Social Security benefits, has been increasing. For those born in 1960 or later, the FRA will reach 67 in 2026.
Claiming benefits before your FRA results in a reduced monthly payment, while delaying until age 70 can increase your benefits through delayed retirement credits. Claiming at age 62 with an FRA of 67, for instance, results in about a 30% permanent reduction.
Comparing Retirement Age Decisions
| Action | Born 1959 | Born 1960+ |
|---|---|---|
| Full Retirement Age | 66 and 10 months | 67 |
| Claim at age 62 | Permanently reduced benefit. | Permanently reduced benefit (steeper reduction for those with FRA 67). |
| Claim at age 70 | Maximize benefits with delayed retirement credits. | Maximize benefits with delayed retirement credits. |
Higher Earnings Test Limits and Taxable Wage Base
For beneficiaries who work before reaching their FRA, the earnings test limits how much can be earned before benefits are reduced. These limits are expected to increase in 2026. For those below FRA for the full year, the limit is estimated at $24,360, with $1 withheld for every $2 earned over this amount. For those reaching FRA in 2026, the limit is projected to be $64,800, with $1 withheld for every $3 earned over the limit.
The maximum income subject to Social Security taxes (the wage base) is also projected to increase to $183,600 in 2026, up from $176,100 in 2025.
Other Noteworthy Social Security Changes for 2026
- End of Paper Checks: Effective September 30, 2025, paper checks for federal benefits will cease. All recipients must switch to electronic payments via direct deposit or a Direct Express card.
- Medicare Premium Hikes: Medicare Part B premiums, which can be deducted from Social Security, are estimated to rise to $206.50 per month in 2026, potentially offsetting much of the COLA.
- Student Loan Garnishments: Collection of defaulted student loans is resuming, which could lead to a 15% reduction in monthly Social Security benefits for those in default.
How Inflation Impacts the 2026 COLA for Seniors
Critics argue that the CPI-W used for COLA calculations doesn't fully capture the impact of rising healthcare and housing costs on seniors. This means that while a COLA provides an increase, the actual purchasing power for many retirees may not keep pace with their specific expenses.
Planning for Social Security Changes
Being informed and proactive about these changes is crucial for seniors. Understanding the impact of the new FRA, potential COLA offsets from Medicare premiums, and the shift to electronic payments is key to managing retirement finances.
Action Steps for Seniors
- Review Your Statement: Access your my Social Security account on the official SSA website to check your earnings history and benefit estimates: www.ssa.gov.
- Estimate Net Benefit: Factor in the projected COLA and Medicare Part B premium increase to estimate your actual net monthly benefit.
- Adjust Your Budget: Consider potential increases in healthcare costs and other expenses when reviewing your budget.
- Evaluate Retirement Age: If your FRA is 67, carefully assess the financial implications of claiming benefits at different ages.
- Transition to Electronic Payments: If you receive paper checks, arrange for direct deposit or a Direct Express card before the September 30, 2025 deadline.
Conclusion
Navigating what are the Social Security changes for 2026 for seniors is vital for sound retirement planning. The projected COLA, the move to a higher full retirement age, and increased earnings limits are significant updates. While providing some benefit increases, these changes also highlight the ongoing challenge of rising costs, particularly for healthcare. Informed planning allows seniors to better manage these adjustments.
