Upcoming Changes to Social Security Benefits in 2026
In 2026, around 75 million Americans are set to see a 2.8% cost-of-living adjustment in their Social Security and Supplemental Security Income benefits. This increase is projected to add about $56 to monthly payments, according to information from the Social Security Administration. But, a few other updates—like new tax credits for seniors and potential changes in Medicare Part B premiums—will also influence the final amount retirees actually receive starting in January.
The Social Security Administration plans to send out a one-page statement to beneficiaries beginning in early December. This document will outline “the exact dates and amounts” for the new benefits and deductions for 2026. Beneficiaries can also access their Cost of Living Adjustment Notices online. My Social Security accounts will be available starting November 12, and all notices should be online by December 12. Meanwhile, paper statements will start reaching people in the mail on December 1, with expectations for everyone to get them by the end of December.
It’s wise for beneficiaries to think about how these changes might impact their monthly benefits in the coming year.
Tax Changes for Seniors
Federal taxes still apply to Social Security benefits based on individual income levels. However, recent legislation passed in July introduces a senior “bonus” aimed at older adults, providing eligible individuals aged 65 and over with up to $6,000 to help mitigate taxes. This amount is issued as deductions, so most retirees may not notice it until tax season. But, it’s important to realize that it doesn’t operate like a straightforward refund.
“It’s not going to save you a dollar like a tax credit would,” stated Andrew Herzog, a financial planner. The actual savings can vary greatly based on individual financial situations.
Eligibility for this new tax relief isn’t universal; it starts to phase out for individuals earning $75,000 and couples with $150,000. Those with incomes reaching $175,000 for individuals or $250,000 for couples won’t benefit from this change, as reported.
According to the Urban-Brookings Tax Policy Center, seniors earning between $80,000 and $130,000 are likely to gain the most, potentially enjoying an average tax reduction of about $1,100. Still, Joseph Rosenberg, a senior fellow at the center, pointed out that some beneficiaries, particularly those with lower incomes, might find the changes less beneficial since they already pay minimal taxes.
Federal tax rules regarding Social Security remain, meaning benefits could be taxed based on a combination of total income or adjusted gross income, including half of their annual Social Security benefits. For individuals with total income between $25,000 and $34,000, some benefits are taxed, and up to 85% is taxed for incomes over $34,000.
Married couples filing jointly could see up to 50% of their benefits taxed if their combined income is between $32,000 and $44,000, increasing to 85% for higher incomes.
Beneficiaries can opt for tax withholding from their monthly payments, with options of 7%, 10%, 12%, or 22%. Herzog advised that the new senior tax credit may offer some relief for 2026, hinting that it might be beneficial for retirees to reconsider their withholding amounts.
“It’s going to take some calculations to get it right,” he explained, suggesting that tax professionals could use historical tax payments to recommend appropriate withholding rates for Social Security.
Medicare Premium Increases
In 2026, Medicare Part B premiums are also set to increase significantly, with the standard monthly premium rising by 9.7% to $202.90 from $185. This rate hike is among the largest in the program’s history, targeting individuals with annual incomes of $109,000 or less and couples with $218,000 or less.
The income brackets for higher Medicare Part B premiums apply to those with modified adjusted gross incomes above these limits, due to the Income-Related Monthly Adjustment Amount, or IRMAA.
Typically, these premiums are directly deducted from Social Security checks, which can eat into the cost-of-living increases. Fortunately, the Hold Harmless Clause protects certain beneficiaries from having their COLA fully offset by increasing premiums. However, new retirees and those with higher incomes may not qualify for this safeguard, making it crucial for beneficiaries—especially those who’ve experienced significant income changes—to notify the administration about any altering life circumstances.
In planning for future expenses, financial professionals recommend careful tax planning, particularly around potential Medicare premium hikes linked to investment income or property sales.
Upcoming Medicare Enrollment Dates
Social Security recipients might also have deductions for Medicare Part D or private Medicare Advantage insurance taken from their checks. Unlike Part B, these premiums don’t have a hold-harmless clause, meaning they could further reduce benefits. Beneficiaries have until December 7 to review and potentially switch their insurance plans for the upcoming year.
This period allows for comparisons between Original Medicare and Medicare Advantage plans, along with opportunities to change prescription drug plans. It’s a beneficial time for all looking to optimize their coverage and minimize expenses.
Ryan Ramsey from the National Council on Aging encourages those with Medicare coverage to regularly reconsider their options during this annual enrollment period. It’s a good habit that could lead to significant savings, even if no immediate changes are planned.
