Changes to America’s key social programs are on the horizon, courtesy of President Donald Trump, and they’re set to take effect by the end of September.
For the over 53 million retired workers receiving Social Security benefits, this monthly payment is often essential. A long-term Gallup study shows that about 80-90% of retirees depend on this income to varying degrees to manage their expenses.
For nearly 90 years, Social Security has provided crucial financial support for seniors who can no longer work. It’s also extended help to disabled workers and the survivors of deceased employees.
Yet, this program is not static; regular adjustments are made almost every year.
On September 30th, significant changes will reshape Social Security, and by 2026, additional modifications are virtually guaranteed.
Trump’s executive order transforms Social Security
Since Trump’s second inauguration, there has been a notable wave of indirect changes to Social Security. The Social Security Administration (SSA) has announced plans to cut around 7,000 jobs to streamline its operations and boost personal identification methods.
Most beneficiaries can no longer change their direct deposit details or sign up for benefits over the phone. Instead, these actions now have to be completed online through their “My Social Security” accounts with two-factor authentication.
A pivotal change stems directly from Trump himself. On March 25th, he signed an executive order to phase out paper-based payments by September 30, 2025. This aims to curb Social Security fraud and save money for government programs. Electronic fund transfers cost the federal government about $0.15, while issuing paper checks costs around $0.50. With over 500,000 beneficiaries still reliant on checks, this shift could save over $2 million annually.
Those receiving checks will need to either set up direct deposits at a bank or opt for a prepaid debit card designed for federal benefits.
But this is just one of the various changes impacting nearly 70 million traditional Social Security beneficiaries. As the new year approaches, several additional changes are anticipated.
1. Possible salary increase for Social Security beneficiaries
The most awaited alteration is likely the Cost of Living Adjustment (COLA), which will be disclosed on October 15th. This adjustment is essentially a pay raise for recipients, meant to mitigate the impact of inflation.
Based on the July inflation report, two independent forecasts suggest the 2026 COLA may sit at 2.7%. If true, this would not only mark the first time this century that COLAs have reached at least 2.5% in five consecutive adjustments, but it would also translate into an extra $54 per month for the average retiree and $43 for beneficiaries with disabilities or survivors.
However, it’s worth noting that the Medicare council has predicted an 11.5% rise in Part B premiums, potentially bumping it up to $206.20 a month. Coupled with ongoing high costs for housing and healthcare, many beneficiaries could find their purchasing power diminished in 2026.
2. Higher maximum monthly benefits for retirees
On the topic of potential increases, it looks like the maximum monthly Social Security benefits for full retirement age will probably rise next year.
This year, the highest monthly payment for those at full retirement age hit $4,018, which is a $196 increase from 2024. It remains unclear if this trend will continue, but those with higher incomes may see their benefits increase.
It’s important to note that only about 2% of beneficiaries qualify for this maximum monthly payment and must meet three key requirements:
- They need to wait until reaching full retirement age before claiming benefits.
- They should have at least 35 years of qualified work history.
- They must exceed the maximum taxable revenue cap for those 35 years used by the SSA to calculate their monthly payments.
3. Increased borrowing for high-income workers
High-income workers may also see changes in their financial obligations in 2026.
In 2025, all earned incomes from $0.01 to $176,000 will face a 12.4% tax, with income above that threshold being exempt.
This cap generally rises annually alongside the National Average Wage Index (NAWI) and only holds steady during periods of economic downturn. If the projected 2.7% COLA is realized, around 6% of workers earning over $176,100 could find they need to contribute more next year.
4. Increased withholding thresholds for early filers
The retirement income test allows the SSA to withhold some or all benefits if early filers earn too much. For example, those collecting early benefits and under full retirement age can find their profits reduced by $1 for every $2 over $23,400 ($1,950 monthly).
Early filers reaching full retirement age in 2025 can earn $62,160 ($5,180 monthly) while retaining a $1 benefit for every $3 earning above that threshold.
These income limits are projected to rise in 2026, allowing early filers more earnings before withholdings kick in.
5. Increased income thresholds for disability beneficiaries
Those receiving Social Security disability benefits might also see an increase in their income thresholds.
For instance, blind and non-blind workers receiving disability benefits were allowed to earn up to $1,620 and $2,700 per month, respectively, in 2025.
These limits, often referred to as substantial gainful activity limits, are adjusted alongside NAWI. As long as Social Security’s cost-of-living adjustments remain positive, it suggests an overall rise in prices.
