New Year, New Changes to Social Security
We just ushered in the start of a new year. And with it, it brings several new changes to Social Security. If you are one of the millions of Americans receiving benefits, or you are still working and paying into the program, MSN.com says there are a few things you need to know:
COLA kicks in: Starting in January, Social Security recipients will receive bigger benefits. A 2.8 percent cost-of-living adjustment (COLA) will result in an average increase of $56 per month. According to the article, “the average monthly retirement benefit will rise from $2,015 to $2,071. The maximum benefit for someone who claims at full retirement age will increase from $4,018 to $4,152.”
Wage cap increases: Workers paying into Social Security will have a greater portion of their income subject to payroll taxes. In 2026, the taxable maximum will shift from $176,100 to $184,500. The article explains that “means people with higher salaries may have more of their wages taxed for Social Security.”
Earnings test limit increases: For anyone who is still working while collecting Social Security, the rules that determine whether earnings temporarily reduce benefits also change this year. If you are under their full retirement age, the limit increases to $24,480 annually, up from $23,400. If you reach full retirement age at some point in 2026, then you can earn up to $65,160 before facing reductions (that’s an increase from $62,160 in 2025). Keep in mind, anyone who has already reached their full retirement age will not be affected, as the earnings test no longer applies.
The Seniors Trust is committed to improving the financial well-being of older Americans through the passage of the Social Security Expansion Act. It will give retirees an immediate benefits increase of about $200 a month, a fair annual COLA, increased minimum benefits, and ensure the long-term solvency of the Social Security program.
