Major updates to Social Security are coming in January 2026. These changes will affect both current retirees and those still working. If you rely on Social Security, or if you plan to shortly, it’s important to understand what’s about to change. Some adjustments are routine, while others mark the end of long-term policy shifts that began decades ago.
In addition to Social Security Updates, another federal change unrelated to Social Security will also bring tax relief to many seniors. While this extra benefit is temporary, it could mean real savings for older Americans. Here’s a full breakdown of what’s changing and how it could affect you or someone you know.
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Cost-of-Living Increase Likely in 2026
Each year, Social Security payments are adjusted to match inflation. This is called a cost-of-living adjustment (COLA). It helps protect people’s buying power as prices for goods and services rise. The Social Security Administration bases this change on the average inflation numbers from the third quarter of the year, using a measurement called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
If inflation is flat or falls, no COLA is issued, though this has only happened three times since 2009. For 2026, experts believe a COLA will happen. The Senior Citizens League estimates the increase could be around 2.6%. This is slightly higher than the 2.5% boost that retirees received in 2025. The final percentage will be announced by the Social Security Administration in October 2025.
Full Retirement Age Will Be 67 for Everyone
Another major change coming in 2026 is the final shift in full retirement age (FRA). In the past, the FRA was 65. But a law passed in 1983 began slowly raising that age. As of January 2026, the full retirement age will officially become 67 for anyone born in 1960 or later.
People can still choose to retire early at age 62, but their monthly benefits will be reduced if they do. On the other hand, waiting until age 70 to claim benefits still allows a person to receive the maximum possible monthly payment. This final move to age 67 marks the end of a process that’s been happening for over 40 years.
Maximum Taxable Earnings Set to Rise Again
Workers also need to watch for another likely change, the increase in maximum taxable earnings. This is the highest amount of annual income that is taxed for Social Security. In 2025, the cap is set at $176,100. Anything earned above that amount is not taxed for Social Security purposes.
This limit usually rises each year with the national average wage index. It stayed the same in some past years, like from 2009 to 2011, but most years bring an increase. For 2026, early projections suggest the cap will rise to around $183,600. This means high-income earners will pay more in Social Security taxes.
New Tax Deduction for Seniors
While not a Social Security change, a new tax deduction starting in 2026 will affect many older Americans. Often referred to as the “senior bonus,” this deduction allows those aged 65 and older to claim an additional standard deduction on their federal taxes.
Seniors could get up to $6,000 extra if filing alone or up to $12,000 if married and filing jointly. This change is part of a law passed during the Trump administration and is set to last until 2028. The White House has said it will help 88% of Social Security recipients avoid paying any taxes on their benefits.
However, this benefit is limited based on income. The deduction begins to phase out for single filers earning more than $75,000 or joint filers earning more than $150,000. It disappears entirely for single filers with modified adjusted gross income (MAGI) over $175,000 and for couples over $250,000.