Most people hear “Social Security changes” and immediately focus on the yearly
cost-of-living adjustment (COLA). For 2026, that’s 2.8%, and the average retired
worker’s gross benefit has risen from around $2,015 per month to $2,071.
Beyond COLA, there are plenty of other changes that can take you by surprise and
have a significant impact on how much of your benefit you actually receive.
Changes in taxes, earnings test thresholds, disability rules, and Medicare
premiums can make a big difference between your gross benefit and what actually
ends up in your bank account.
Unless you’re aware, it’s easy to get caught off guard, and that
can quickly derail your retirement
plan. Here’s what you should know.Â
Medicare premiums are likely eating a chunk of your raise
For many retirees, one of the biggest shocks comes when they compare COLA to
rising Medicare costs. In 2026, the standard Medicare Part BÂ premium has increased
from $185 to $202.90 per month. That’s a jump of $17.90, or almost 10%, compared
to the COLA raise of just 2.8%. The Part B deductible also climbs from $257 to
$283, which has likely made it harder to stretch your retirement dollars.Â
That $17.90 premium hike swallows roughly a third of the average $56 increase
for retirees.
Plus, those who fell into a higher income bracket in 2024 may be facing income-related monthly adjustment amount charges (IRMAA) on both Part B and D.
This two-year look-back may have taken you by surprise, especially if your income has
since substantially decreased. If the income decrease is because of a
significant life change, you can ask the SSA to reconsider.
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The Social Security tax cap has jumped to $184,500
If your spouse still works or you expect to work into your 60s, changes to the
Social Security tax cap can catch you off guard because it can change how much
tax you owe. Social Security only taxes wages and self-employment income up to a
specific amount for old age, survivors, and disability insurance (OASDI). In
2025, that threshold was $176,100. In 2026, that cap has risen to $184,500.
OASDI tax stays at 6.2% for employees or 12.4% if you’re self-employed. That
means that up to $8,400 more of your earnings are subject to taxation this year.
This extra tax burden may have come as a nasty surprise if you didn’t budget for
it. But the higher earnings can increase your eventual benefit by replacing
lower-earning years in your 35-year record.
There’s been an increase in the retirement earnings test limits
Claiming Social Security before full retirement age (FRA)Â while you are still
working triggers the retirement earnings test. In the years before you reach
FRA, you can now earn up to $24,480 per year, or $2,040 per month, without
triggering withholding. If you earn more than this, the SSA withholds $1 for
every $2 you earn.
In the year you reach FRA, you can earn up to $65,160 before withholding kicks
in. And when it does, it drops to $1 for every $3 that you earn. The test ends at the start of the month you reach full retirement age.
Take a look at your projected earnings so you know whether you’re likely to
trigger the earnings test. That way, you won’t find yourself struggling for
money because your check was short or withheld.
The amount SSA withholds isn’t lost forever. When you reach FRA, SSA
recalculates your benefit to credit you for the months when benefits were
withheld.
SSI benefits and disability thresholds have moved up
For older adults with limited income and resources, the federal Supplemental
Security Income (SSI) benefit has risen this year. The maximum monthly
federal payment has increased from $967 to $994 for individuals, and from $1,450 to
$1,491 for joint claimants. Then there’s the “essential person” rate, used when
someone lives with you primarily to care for you. This rate has increased from $484
to $498 per month in 2026. But don’t assume that any state supplements you get
will also increase at the same rate, or at all.
The disability thresholds have also moved higher. In 2026, substantial
gainful activity (SGA) has increased to $1,690 per month for most disabled
workers, up from $1,620 in 2025. Blind recipients can now earn up to $2,830 per
month instead of 2025’s $2,700 limit. And the trial work period (TWP) amount has increased to $1,210.
Yes, this means that if you’re on disability, you can now earn a little more
without exceeding the TWP cap, but you still need to keep careful records. If
you get complacent, you may find yourself no longer eligible to receive
benefits. Make sure to report all work activity promptly to the SSA to avoid overpayments and surprise benefit cuts.
You need more earnings to get work credits
To qualify for Social Security retirement benefits, you need 40 work credits.
You accrue these at a maximum of four per year, based on your annual covered
earnings. In 2026, the amount of earnings you need for one credit has increased from
$1,810 to $1,890. But you can still only earn four per year.
If you are semi-retired, self-employed, or working seasonally and still need
credits to qualify for your retirement benefit, it’s worth checking whether the
work you have planned for this year will give you the full four credits you need.
Bottom line
Higher Medicare premiums, a bigger Social Security tax cap, shifting earnings
limits, and updated disability and SSI rules all work together to determine how
much you pay in, how much you get out, and how far your check will really
stretch this year.
Your best course of action is to understand what changes have taken place and how they
affect you. Check your COLA notice in your “my Social Security” account to see
your gross benefit, what deductions you’ve got, and the net amount you’re receiving. Avoid money mistakes by staying on top of these changes.
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Author Details
Chris Lewis, CEPF
Chris Lewis has spent his career turning data into answers. As the Head of Research at FinanceBuzz and a Certified Educator in Personal Finance, he oversees the data journalism and media relations teams, digging into the personal finance topics that shape Americans’ lives at every stage, from Social Security and retirement income to 401(k) strategies, jobs, and real estate.
