In the United States, the Social Security Administration is governed by the Social Security Act. Since Republican President Donald Trump took office in January 2025, the economic situation in the United States is not particularly buoyant. That is why several aspects of Social Security will undergo changes in the year 2026.
Due to the increase in inflation generated by the imposition of new tariffs by the Trump Administration, one of the increases most expected by SSA beneficiaries is the COLA, which is obtained according to data provided by the Bureau of Labor Statistics. Finding the difference between the CPI-W for the third quarter of 2024 and 2025 will provide the increase figure. The increase in the wage cap, which is made up of payroll taxes on workers, employers, and the OASI Trust Fund and DI Trust Fund, will also see an increase in 2026. The full retirement age (FRA) will be set at 67 in 2026 and is expected to remain unchanged.
To be eligible for Social Security income upon retirement, the beneficiary is required to have 40 work credits over the course of his or her working life. It is estimated that 4 work credits can be earned per year worked (having a heat of $1,810 per credit), although the individual value of these credits is expected to increase by 2026.
Social Security Administration (SSA)
Social Security was founded in the United States in 1935. Since then it has been the agency in charge of caring for Americans in vulnerable situations, especially retirees, people with disabilities and people with little or no income. It has undergone many changes over the years, including the famous 1983 amendments, which gradually increased the full retirement age (FRA), given the increase in life expectancy of Americans. Many more changes have occurred and are occurring. Beneficiaries should stay informed, especially those planned for the coming year 2026.
Main changes in Social Security for 2026
Five major changes are expected for the coming year:
- Annual cost of living adjustment (COLA). Due to inflation, prices go up and therefore, beneficiaries need to have higher incomes to be able to cope with these increases. This is the function of the COLA, which is calculated by comparing the Consumer Price Index for Urban Wage Earners and Employees (CPI-W) data for the third quarter of the current year with that of the previous year. The positive difference between the two will be the percentage COLA increase that will be applied in January of the following year. It is expected to be 2.4%, although the figures are not yet official.
- Increase in the wage ceiling. Social Security is financed by 6.2% of taxes paid by workers and employers, as well as the OASI and DI trust funds. It is expected to increase from the current figure of $176,000 by 2026.
- New maximum monthly benefit. It is important to know that if a beneficiary retires before reaching his or her FRA, the benefit he or she receives from SSA will be reduced. An increase is also expected by 2026 from the current figure of $4,018.
- New earnings test limit. Social Security benefits are claimable beginning at age 62, although the FRA has been set at 66 years and 10 months for those born in 1959. If benefits are claimed before the FRA, the beneficiary will have to have income limits.
- Increased threshold for earning work credits. A work credit is worth $1,810 in 2025. Over the course of his or her working life, a worker has to accumulate 40 in order to qualify for Social Security benefits. Only a maximum of 4 credits can be earned per year.
These are some of the changes that are expected to occur by 2026 in the Social Security Administration (SSA). It is advisable for beneficiaries to keep abreast of all SSA updates, in order to be informed of possible changes in the amount of their benefits.
Have you heard about the paycheck increase for retirees in 2026?