Many older Americans stand to benefit.
Millions of older Americans currently rely on Social Security for their monthly income. And even if you retire with a significant amount of retirement benefits saved up, you may still be heavily dependent on those benefits to make ends meet after you quit your job.
Although Social Security has been around for a long time, the program tends to change every year, which can have a positive impact on beneficiaries. Here are two positive Social Security changes coming in 2026 that could bring you more money.
1. 2.8% cost of living adjustment
Inflation tends to increase the cost of living over time. But there are many people who have been collecting Social Security for decades. Unless benefits are adjusted for inflation, seniors will certainly lose purchasing power.
Thankfully, Social Security benefits are subject to an automatic cost-of-living adjustment (COLA) each year, indexed to inflation. In 2025, Social Security benefits increased by 2.5%. However, COLA in 2026 will be a little higher. It is 2.8%.
Let’s be clear: a 2.8% COLA is by no means the largest Social Security increase ever achieved. But historically, it’s not a bad conflict. For context, there was a year in which my Social Security benefits did not qualify for any COLA.
More importantly, the 2.8% COLA indicates that while inflation remains a major problem, it is less prevalent than it was immediately after the pandemic. Put another way, if the Social Security COLA in 2026 had been higher, you would have sacrificed higher costs. So a COLA of 2.8% is actually quite satisfactory.
2. Increased revenue test cap
Continuing to work after retirement has benefits beyond extra pay. Work can serve as a social outlet and give people a reason to get out of the house.
But the reality is that many people who choose to work after retirement do so because they need extra money. And in 2026, seniors on Social Security will have more flexibility in earning income while still receiving benefits.
If you are working while receiving Social Security benefits before reaching full retirement age, you are subject to means-tested limitations. If you exceed that limit, a portion of your Social Security benefits will be garnished.
In 2026, the Social Security earnings test limit for people under full retirement age for any given year will increase from $23,400 to $24,480. If you fall into this category, your Social Security deduction will be $1 for every $2 you earn over $24,480.
If you reach full retirement age in 2026, the income-tested limit is even higher, from $62,160 to $65,160. And beyond that, Social Security is deducted at the rate of $1 for every $3 of income.
Higher means-tested limits mean you can keep more of your Social Security benefits if you work and earn a decent wage. This is also a positive change.
However, keep in mind that the Social Security benefits that are deducted through the means test are not money you can part with forever. Once you reach full retirement age, that money will be added to your monthly check.
Sometimes change is good
When people hear the word “change,” they can prepare themselves for disappointment. In this case, these two changes that Social Security is implementing in the new year could improve many people’s finances.
Whether you’re already collecting benefits or not, it’s important to read up on how Social Security will change in 2026. There may be other hidden updates that you should be aware of, so it’s helpful to stay informed.
The Motley Fool has a disclosure policy.
The Motley Fool is a USA TODAY content partner providing financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.
