Three changes are coming to Social Security in 2026 that will affect how much you receive, when you can claim, and how work affects your benefits
The Social Security Administration has announced three significant shifts taking effect in 2026. The full retirement age will increase for people born in 1960, the earnings test threshold will rise, and the cost-of-living adjustment formula may change based on inflation between now and then. None of these changes happen automatically — you need to understand how each one applies to your situation.
These changes do not affect current retirees uniformly. Your birth year, your current work status, and when you claimed benefits all determine which changes matter to you. Understanding what shifts in 2026 helps you plan ahead if you have not yet claimed, or adjust your strategy if you are still working while receiving benefits.
Key Takeaways
- The full retirement age increases to 67 for people born in 1960, meaning you must wait longer to receive your full benefit amount without reduction.
- The earnings test limit — the amount you can earn before Social Security reduces your benefit — will increase in 2026, though the exact figure depends on inflation between now and then.
- People born in 1960 who claim before age 67 will see a larger permanent reduction to their monthly benefit than those born in 1959.
- The cost-of-living adjustment for 2026 will be announced in October 2025 and will reflect inflation over the past year.
Full Retirement Age Increases to 67 for People Born in 1960
Your full retirement age is the age at which Social Security pays you your full benefit amount without any reduction for early claiming. For people born in 1960, this age moves from 66 and 10 months to 67. This is the next step in a gradual increase that began in 2003 and will continue through 2027.
If you were born in 1960 and claim Social Security before age 67, your monthly payment will be permanently reduced. The reduction is larger than it was for people born in 1959, because you are claiming further below your full retirement age. For example, claiming at age 62 instead of 67 results in a steeper cut to your monthly benefit than it did for the previous birth cohort.
If you wait until 67 or later to claim, this change does not reduce your benefit. Waiting past 67 actually increases your payment through delayed retirement credits, which add roughly 8 percent per year until age 70. People born in 1960 have the same delayed credit opportunity as everyone else — the full retirement age increase only affects those who claim early.
Earnings Test Threshold Rises, Affecting Working Beneficiaries
If you claim Social Security before your full retirement age and continue to work, Social Security reduces your benefit based on how much you earn. The earnings test sets a threshold: earn above it, and your benefit drops by $1 for every $2 you earn above the limit (or $1 for every $3 in the year you reach full retirement age).
In 2026, this threshold will increase from its 2025 level. The exact amount depends on wage inflation between now and then — the Social Security Administration adjusts the threshold annually based on national wage trends. The 2025 threshold is $23,400 for people under full retirement age for the entire year, and $62,160 for the year you reach full retirement age. Expect both figures to rise in 2026.
This change helps working beneficiaries who have not yet reached full retirement age. If you are claiming early and working, a higher threshold means you can earn more before your benefit is reduced. Once you reach your full retirement age, the earnings test no longer applies — you can earn any amount without affecting your benefit.
Cost-of-Living Adjustment for 2026 Will Be Announced in October 2025
Every year, Social Security adjusts benefits for inflation through a cost-of-living adjustment, or COLA. The 2026 COLA will be announced on the second Wednesday of October 2025 and will take effect in January 2026. This adjustment reflects inflation measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of 2024 through the third quarter of 2025.
The COLA amount is not set in advance — it depends entirely on inflation during that measurement period. If inflation is higher, the COLA is higher. If inflation is lower or prices fall, the COLA is lower or zero. The 2025 COLA was 3.2 percent, but the 2026 figure will be different based on actual inflation data.
If you are already receiving Social Security, the 2026 COLA will automatically increase your monthly payment. You do not need to do anything. If you claim Social Security for the first time in 2026, your initial benefit amount will already reflect the 2026 COLA — you will not receive a separate adjustment in your first year.
How These Changes Affect Your Claiming Decision
If you were born in 1960 and have not yet claimed, the higher full retirement age means the gap between your early claiming reduction and your full benefit has widened. Claiming at 62 costs you more in permanent monthly reduction than it would have for someone born in 1959. This makes waiting longer more valuable in dollar terms, though the break-even point still depends on your individual life expectancy and financial situation.
If you are working and receiving benefits before full retirement age, the higher earnings test threshold gives you more room to earn without a benefit reduction. This may make it less costly to claim early while you are still working, since you can earn more before the reduction kicks in.
The 2026 COLA will increase all current benefits, but the exact amount is unknown until October 2025. If you are deciding when to claim, remember that delaying past your full retirement age increases your benefit by about 8 percent per year, and this increase compounds with future COLAs.
What Happens If You Already Claimed Before 2026
If you claimed Social Security before 2026, these changes do not affect your benefit amount directly. Your full retirement age was already set when you claimed. The earnings test threshold increase applies to you only if you are still working and have not yet reached your full retirement age.
You will receive the 2026 COLA increase automatically, just as you have received all previous adjustments. There is no action required on your part. The increase will appear in your January 2026 payment.
If you are working and your earnings exceed the 2026 earnings test threshold, your benefit will be reduced according to the new threshold amount. Once you reach your full retirement age, the earnings test stops explore, even if you continue to work.
Frequently Asked Questions
Does the full retirement age increase affect people born before 1960?
No. People born in 1959 and earlier already have their full retirement age set. For people born in 1959, full retirement age is 66 and 10 months. The increase to 67 applies only to people born in 1960 and later.
Can I still claim at 62 in 2026?
Yes. You can claim Social Security as early as age 62 regardless of your full retirement age. However, if you were born in 1960, claiming at 62 will result in a larger permanent reduction to your monthly benefit than it would have for someone born in 1959, because your full retirement age is now 67 instead of 66 and 10 months.
Will the earnings test threshold increase affect my benefit if I am already at full retirement age?
No. The earnings test does not explore once you reach your full retirement age. You can earn any amount without affecting your Social Security benefit. The threshold increase only matters if you are claiming before full retirement age and still working.
How much will my benefit increase from the 2026 COLA?
The 2026 COLA percentage will be announced in October 2025. Your benefit will increase by that percentage. For example, if the COLA is 2.5 percent, a $1,500 monthly benefit would increase by $37.50. The exact amount depends on inflation data collected through September 2025.
What should I do now to prepare for these 2026 changes?
If you have not claimed yet, review your full retirement age and consider how the larger early-claiming reduction affects your timeline. If you are working and receiving benefits, note the new earnings threshold when it is announced in October 2025. If you are already receiving benefits, no action is needed — your benefit will adjust automatically.