Social Security Shifts in 2026: What You Need to Know

In 2026, Social Security will see several changes that could impact your retirement plans.

Full Retirement Age Increase

• The full retirement age will officially increase to 67 for those born in 1960 or later.
• If you turn 62 in 2026, you will need to wait five more years to claim your full benefits.
• Filing at 62 will result in a permanent reduction of up to 30% in benefits.
• Delaying benefits until after your full retirement age can increase your benefits by 8% per year until age 70.

Cost-of-Living Adjustment (COLA)

• The projected COLA for 2026 is 2.7%, slightly higher than the 2.5% increase in 2025.
• The actual COLA will not be announced until October 24, 2025, due to the current government shutdown.
• The Bureau of Labor Statistics (BLS) calculates the Consumer Price Index (CPI), which determines the COLA.

Increase in Social Security Taxes

• High earners will see an increase in the amount of their income subject to Social Security taxes.
• In 2025, the wage cap is $176,100, but in 2026, it is projected to increase to $183,600.
• Higher-income workers could pay up to $465 more in Social Security taxes in 2026.
• Combined with employer contributions, the total hit could reach about $930.

Earnings Test Limits for Working Retirees

• For retirees younger than their full retirement age, the earnings test limits will increase.
• In 2025, the earnings limit is $23,400, but in 2026, it is projected to increase to $24,360.
• For those in the year they reach their full retirement age, the earnings limit is $62,160 in 2025, but it is projected to increase to $64,800 in 2026.

Social Security Fairness Act (SSFA)

• The SSFA will take full effect in 2026, eliminating two controversial rules:
• The Windfall Elimination Provision (WEP)
• The Government Pension Offset (GPO)
• These rules have reduced Social Security benefits for public sector retirees who receive pensions from jobs that did not pay into Social Security.
• With the repeal of these rules, many retirees will receive their full Social Security benefits for the first time.

Long-Term Funding Crisis

• Despite these changes, Social Security still faces a long-term funding crisis.
• According to the Social Security Administration's 2025 Trustees Report, the combined Old-Age and Survivors Insurance (OASI) and Disability Insurance trust funds are projected to be depleted by 2034.
• At that time, incoming payroll taxes would only cover about 80% of scheduled benefits, meaning cuts of roughly 20% unless Congress acts.