Three major changes take effect in 2026

Social Security is introducing three separate changes in 2026 that affect how much you receive, when you can claim, and how work affects your benefits. The full retirement age rises for people born in 1960, the earnings test threshold increases, and the cost-of-living adjustment formula shifts. None of these changes happen automatically — you need to understand how each one applies to your situation.

These changes were written into law decades ago and are now taking effect on schedule. They do not require new paperwork from you, but they do change the math behind your benefit amount and when you can claim without a reduction.

Key Takeaways

  • Full retirement age reaches 67 for people born in 1960, meaning you must wait until then to receive your full benefit amount without reduction.
  • The earnings test limit — how much you can work before Social Security reduces your benefit — rises to $23,400 per year in 2026, though the exact amount changes yearly based on wage growth.
  • The cost-of-living adjustment (COLA) for 2026 will be announced in October 2025 and determines how much your monthly benefit increases.
  • If you claim before full retirement age and earn above the limit, Social Security withholds $1 for every $2 you earn over the threshold.
  • These changes do not affect people already receiving benefits, except for the annual COLA increase that applies to everyone.

Full retirement age reaches 67 for people born in 1960

The full retirement age — the age at which you receive your complete benefit amount without any reduction — has been gradually rising since 2003. In 2026, it reaches 67 for anyone born in 1960. This means if you were born in 1960, you must wait until age 67 to claim your full benefit. If you claim at 62, your benefit will be permanently reduced by roughly 30 percent.

The full retirement age will continue to rise for people born after 1960, reaching 67 and two months for those born in 1961, and continuing to climb until it reaches 67 and eight months for people born in 1943 or later. After that, it stays at 67 and eight months for all future beneficiaries.

You can still claim as early as 62, but the reduction grows larger as the full retirement age rises. Conversely, if you wait past your full retirement age, your benefit increases by about 8 percent per year until age 70, when the increase stops.

Earnings test threshold increases to $23,400 in 2026

The earnings test limits how much you can earn from work before Social Security reduces your benefit if you claim before full retirement age. In 2026, that limit is $23,400 per year. This amount changes every year based on national wage growth, so the 2027 threshold will be different.

If you earn more than $23,400 in 2026 and you have not yet reached full retirement age, Social Security withholds $1 in benefits for every $2 you earn above the limit. For example, if you earn $25,400, you are $2,000 over the limit, so Social Security withholds $1,000 of your annual benefit.

The earnings test applies only to wages and self-employment income. It does not count investment income, pensions, annuities, or rental income. Once you reach full retirement age, the earnings test no longer applies, even if you continue working and earning substantial income.

Cost-of-living adjustment for 2026 will be announced in October 2025

Every year, Social Security benefits increase by a percentage called the cost-of-living adjustment (COLA). The COLA for 2026 will be announced in October 2025 and takes effect in January 2026. The amount depends on inflation measured by the Consumer Price Index and is set by law — Social Security does not choose the percentage.

The COLA applies to everyone already receiving benefits, regardless of age or when they claimed. It does not affect the benefit amount you will receive when you first claim; it only increases the amount you get each year after you start. The 2025 COLA was 3.2 percent, but the 2026 COLA will be different based on inflation between now and October 2025.

If you have not yet claimed, the COLA does not affect you until you start receiving benefits. Your initial benefit amount is calculated based on your earnings record and the age at which you claim, not on the COLA.

How these changes interact if you claim before full retirement age

If you were born in 1960 and plan to claim before age 67, you face both the higher reduction for claiming early and the earnings test if you work. Claiming at 62 means a permanent 30 percent reduction. If you also earn more than $23,400 in 2026, you lose an additional $1 for every $2 over that threshold.

For example, suppose you claim at 62 in 2026 and your full retirement age benefit would be $2,000 per month. Your benefit is reduced to roughly $1,400 per month. If you earn $25,400 that year, you are $2,000 over the earnings limit, so Social Security withholds $1,000 of your annual benefit — reducing your payment by about $83 per month for that year.

Once you reach full retirement age (67 in your case), the earnings test disappears and you receive your full reduced benefit with no further withholding, even if you continue working. The reduction for claiming early stays permanent, but the earnings test stops applying.

People already receiving benefits see only the COLA increase

If you are already receiving Social Security in 2026, the full retirement age change and earnings test increase do not affect you. Your benefit amount stays the same except for the annual COLA increase announced in October 2025. You do not need to do anything — the increase is automatic.

The earnings test also does not apply to you if you have already reached full retirement age. If you have not yet reached full retirement age and you work, the earnings test still applies to you, but the threshold is the new 2026 amount of $23,400.

Planning around the 2026 changes

If you were born in 1960 and are considering when to claim, the higher full retirement age means waiting until 67 preserves more of your benefit than it would have under the old rules. The trade-off is that you receive nothing until then. A financial advisor or Social Security's own retirement estimator can show you the lifetime difference between claiming at 62 versus 67 based on your specific earnings record.

If you plan to work while receiving benefits before full retirement age, the higher earnings threshold gives you slightly more room to earn without triggering withholding. However, the threshold still applies, so tracking your income carefully is important if you are close to the limit.

You can view your earnings record and get a benefit estimate at ssa.gov using your personal account, or call Social Security at 1-800-772-1213 to speak with someone about your specific situation.

Frequently Asked Questions

Does the full retirement age change affect me if I was born before 1960?

No. If you were born in 1959 or earlier, your full retirement age is already set at 66 or lower. The 2026 change affects only people born in 1960. If you were born after 1960, your full retirement age is higher than 67 and will continue rising until it reaches 67 and eight months.

Can I still claim at 62 in 2026?

Yes. You can claim Social Security as early as 62 regardless of your full retirement age. However, the reduction for claiming early is larger when full retirement age is 67 than it was when it was 66. If you were born in 1960, claiming at 62 means a permanent 30 percent reduction instead of 25 percent.

If I work and earn over the earnings test limit, do I lose my benefits permanently?

No. Social Security withholds part of your benefit for that year only, based on how much you earn over the limit. Once you reach full retirement age, the earnings test stops applying entirely, and you receive your full benefit regardless of how much you earn. The withholding is temporary, not permanent.

How do I find out what my 2026 COLA increase will be?

The COLA for 2026 will be announced in October 2025. You can check ssa.gov in October, or call 1-800-772-1213 after the announcement. If you have a my Social Security account, the increase will show there once it takes effect in January 2026.

Do these changes affect Supplemental Security Income (SSI)?

The full retirement age change does not apply to SSI, which is a separate program for people with disabilities or limited income. The COLA does apply to SSI benefits. The earnings test applies to SSI in a different way — SSI has its own earnings exclusions and thresholds that are separate from Social Security's earnings test.