A new year can also bring a fresh start for Social Security beneficiaries — including changes to monthly payments, earnings limits for those who continue working, and cost-of-living adjustments that affect household budgets.
As 2026 begins, several updates to Social Security rules and benefits are taking effect. Understanding these changes can help retirees and near-retirees make informed financial decisions without unexpected hits to their income. Full retirement age now 67 for younger retirees
For anyone born in 1960 or later, the full retirement age (FRA) is now 67. This is the age at which workers who paid into Social Security can collect 100% of their earned retirement benefits.
The full retirement age is a key benchmark when planning income for 2026, alongside personal savings, IRAs and 401(k) accounts. Claiming benefits before reaching that age results in permanently reduced monthly payments. A 2.8% cost-of-living increase
Social Security benefits will rise by 2.8% in 2026, the annual cost-of-living adjustment (COLA) designed to help offset inflation. On average, this increase adds about $56 per month to retirement checks.
Advocacy groups such as The Senior Citizens League say the increase may still fall short of covering rising costs for essentials, particularly health care. One reason is that COLA calculations must also account for increases in Medicare premiums and deductibles, which are typically deducted before retirees receive their monthly benefits.
The COLA increase will arrive first for Supplemental Security Income (SSI) recipients, who will see the adjustment on December 31. Retirees receiving Social Security will see the increase in January, on January 2, 14, 21 or 28, depending on their date of birth.
Income limits for retirees who keep working
Workers can begin collecting Social Security retirement benefits as early as age 62, but doing so reduces benefits by about 30%. Those who continue working while collecting benefits should also be aware of income limits set by the Social Security Administration.
These limits apply only until the month a beneficiary reaches full retirement age. After that point, earnings no longer reduce Social Security payments. For 2026: The annual earnings limit is $24,480 (or $2,040 per month) .
For every $2 earned above that limit, $1 is withheld from Social Security benefits.
Those who reach full retirement age in 2026 face a higher threshold: $65,160. In that case, $1 is withheld for every $3 earned above the limit until the month full retirement age is reached.
For employees, gross wages are counted. For self-employed individuals, net earnings are used. Planning ahead
While Social Security rules can be complex, the key takeaway for 2026 is preparation. Knowing when to claim benefits, how much you can earn while working, and how COLA increases interact with rising expenses can help retirees and near-retirees protect their income and avoid surprises.
As inflation, health care costs and longevity continue to shape retirement planning, understanding these annual changes remains essential for financial stability.
By SARAH MORENO/Miami Herald
