Key Points
- Social Security is expected to undergo a number of changes in 2026.
- The program’s maximum benefit should increase, as well as its earnings test limit.
- Of all of the change anticipated, retirees are no doubt most excited to get a boost to their monthly checks.
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October could potentially be a huge month for Social Security. If things go off without a hitch, the Social Security Administration is scheduled to announce a number of key changes to the program later this month.
Some of those changes include:
- A new maximum monthly benefit
- A new earnings-test limit, which applies to some seniors who work and collect Social Security at the same time
- A new earnings requirement for work credits
- A new wage cap
Not every change is one people will be happy about. A higher wage cap, for example, will require higher earners to open their wallets and pay into Social Security even more. A new maximum monthly benefit, on the other hand, is something to celebrate.
But there’s one change retirees on Social Security are apt to be very excited about in the new year. It’s a change that could have a huge impact on their day-to-day finances.
What will 2026’s cost-of-living adjustment look like?
Each year, Social Security benefits are eligible for a cost-of-living adjustment, or COLA. COLAs are supposed to protect retirees from inflation by allowing Social Security benefits to rise as living costs increase.
In 2025, Social Security recipients got a 2.5% COLA. But so far, experts are calling for a larger Social Security COLA in 2026 — one that could come in at 2.7% or even higher, depending on how much inflation picked up in September.
The reality is that many retirees live paycheck to paycheck, with Social Security being their only paycheck. A larger COLA in 2026 could be a huge help to people who need the extra money to keep up with their costs.
A 2.7% COLA, or something in that vicinity, could also be great news for seniors for another reason — it’s a larger bump than 2025’s raise, but it’s also not so incredibly large.
A very generous COLA — say, one in the 5% or 6% range — would be an indication of surging inflation. That could be dangerous for seniors and Americans as a whole.
A moderate but reasonable COLA in the ballpark of 2.7% means that inflation is still pretty modest. That’s a good thing for people who don’t have a lot of wiggle room in their budgets.
It’s best not to rely too heavily on Social Security COLAs
While the 2026 COLA may be the most eagerly anticipated Social Security change for the new year, the reality is that relying on those raises a lot isn’t the best thing. COLAs have long failed to help Social Security recipients keep pace with inflation, even though that’s precisely what they’re designed to do.
A better idea is to have some income outside of Social Security to supplement those checks. That income could come from a variety of sources, such as:
- An IRA or 401(k)
- A part-time job
- An annuity
- Renting out a room in your home
With any luck, 2026’s Social Security COLA is one retirees will be happy with. And chances are, they’ll care more about that change than any other. But it’s important to recognize that Social Security COLAs typically only go so far, and to not bank too heavily on next year’s raise, no matter what it amounts to.