Social Security Shifts in 2026: What You Need to Know

In 2026, Social Security will see several changes that could impact your retirement plans. One of the biggest changes is the official increase of the full retirement age to 67 for those born in 1960 or later. This means that if you turn 62 in 2026, you will need to wait five more years to claim your full benefits. However, you can still file at 62, but your benefits will be permanently reduced by up to 30%. On the other hand, delaying your benefits until after your full retirement age can increase your benefits by 8% per year until age 70. Another change in 2026 is the projected cost-of-living adjustment (COLA) of 2. 7%, which is slightly higher than the 2. 5% increase in 2025. This adjustment is based on the Consumer Price Index (CPI) and is designed to help Social Security benefits keep up with inflation. However, the actual COLA for 2026 will not be announced until October 24, 2025, due to the current government shutdown. The Bureau of Labor Statistics (BLS) is responsible for calculating the CPI, and the shutdown has delayed the release of the September CPI report. In addition to these changes, high earners will also see an increase in the amount of their income that is subject to Social Security taxes. In 2025, the wage cap for Social Security taxes is $176, 100, but in 2026, it is projected to increase to $183, 600. This means that higher-income workers could pay up to $465 more in Social Security taxes in 2026. Since employers also contribute to Social Security taxes, the combined hit could reach about $930. For working retirees who are younger than their full retirement age, the earnings test limits will also increase in 2026. The earnings test limits how much you can earn without affecting your Social Security check. In 2025, the earnings limit for those under their full retirement age is $23, 400, but in 2026, it is projected to increase to $24, 360. For those who are 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. The Social Security Fairness Act (SSFA) will also take full effect in 2026. This act eliminates two controversial rules that have reduced Social Security benefits for public sector retirees who receive pensions from jobs that did not pay into Social Security. These rules are the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). With the repeal of these rules, many retirees will receive their full Social Security benefits for the first time. 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.