Social Security Updates for 2026: What You Should Know

Matthew Allgood |

At Allgood Financial in Nashville, our mission is simple: to help you “do all good things” through thoughtful planning, deep relationships, and a secure financial future. As we look ahead to 2026, it’s important to understand the key updates from the Social Security Administration (SSA), how they could impact your retirement, your working years, and long-term planning. Here’s what’s new, what’s changing, and how you can be ready. 

What’s New in 2026: The Big Changes 

A 2.8% Cost-of-Living Adjustment (COLA) 

The headline: Social Security benefits will rise 2.8% in 2026. On average, retirees can expect about $56 more per month in their checks starting in January. 

  • Nearly 71 million beneficiaries will see the raise, including those receiving retirement, disability (OASDI), and Supplemental Security Income (SSI) benefits.
  • SSI payments for individuals will increase to $994/month, and for couples to $1,491/month. (Source: Social Security Administration) 

The COLA formula is tied to inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as calculated by the Bureau of Labor Statistics each year.  

Changes to Social Security Payroll and Tax Rules 

2026 brings several important thresholds and limits that affect current workers contributing toward future benefits: 

  • The maximum taxable earnings subject to Social Security tax rises from $176,100 to $184,500.
  • To earn Social Security credits in 2026, you must make at least $1,890 per credit, meaning $7,560 in annual earnings to get four credits.
  • The full retirement age (FRA) continues its phased increase:
  • Those born in 1959 reach an FRA of 66 years and 10 months.
  • Those born in 1960 or later hit an FRA of 67—this completes the decades-long shift in retirement age under current law. 

For workers under full retirement age, 2026 raises the earnings limits where benefits may be reduced: 

  • Under FRA: $24,480/year before reductions begin (up from $23,400 in 2025).
  • Year turning FRA: $65,160/year (up from $62,160 in 2025).  

Benefit Maximums and Disability Earnings Thresholds Rising 

  • The maximum monthly Social Security benefit (for someone retiring at full retirement age) will rise to $4,152/month in 2026.
  • For disabled beneficiaries and other thresholds tied to work activity, the Substantial Gainful Activity (SGA) amount increases from $1,620 to $1,690/month.  

When Will This Take Effect for You 

The COLA increase becomes effective with your January 2026 Social Security payment. SSI increases go out with the December 31, 2025 payment. 

The SSA will mail out individual COLA notices throughout December 2025, but if you have a “my Social Security” account, you may see your updated amount online sooner. 

What It All Means for You & Your Planning 

For Retirees and Current Beneficiaries 

The 2.8% COLA is a meaningful boost, but keep in mind that rising healthcare costs, especially for Medicare premiums and out-of-pocket care, could offset part of the increase. Seniors relying heavily on benefits may still feel stretched. 

Still, this COLA hike represents the ongoing commitment of Social Security to adjust for inflation and preserve purchasing power, helping make day-to-day living a little more manageable. 

For Active Workers 

If you're still working or returning to the workforce, the rise in the taxable wage cap and credit thresholds means: 

  • Paying into Social Security on a larger portion of your income
  • Potentially earning more credits toward your future benefit
  • Planning around the fact that FRA is now permanently set at age 67 for 1960and-later birth years 

The changes may affect your long-term benefit amount. Delaying taking benefits (up to age 70) still remains one of the most effective strategies to maximize your Social Security income. 

For Younger Generations & Long-Term Planning 

All of these updates underscore a broader fact: Social Security is evolving, and so should your approach to financial planning. Factors like rising life expectancy, inflation, and program funding mean it’s more important than ever to integrate Social Security strategy into your broader retirement and wealth plan. 

Why This Matters for Middle Tennessee Families 

At Allgood Financial, we know that many of our clients throughout Nashville and the Middle Tennessee region rely on a mix of savings, pensions, and Social Security for retirement income. These 2026 changes can affect every household differently: 

  • For retired couples, the 2026 COLA might mean a modest but meaningful increase in household income.
  • For working families, the higher taxable wage cap and credit thresholds may influence when to retire, how much to save, or whether to delay benefits.
  • For young professionals, this is a reminder to start thinking about long-term planning now; not just “what Social Security will give me,” but how it fits into a full retirement roadmap. 

How Allgood Financial Can Help You Navigate 2026 Changes 

  1. Review your retirement projections — Let’s update your Social Security assumptions with the new 2.8% COLA and 2026 rules to see how it shifts your retirement income.
  2. Assess whether to claim now, delay, or adjust timing — For clients near retirement age, we can run the numbers to show the tradeoffs between claiming early vs delaying to maximize lifetime benefits.
  3. Incorporate Social Security into a comprehensive plan — From taxes to estate planning to healthcare costs, Social Security is one piece of your financial puzzle. We’ll help you build a plan that accounts for all variables. 

If you’ve been putting off a retirement review, or you’re not sure how 2026 changes affect you, now is the perfect time. Reach out to us at Allgood Financial for a no-pressure consultation. 

Final Thoughts 

2026’s Social Security updates bring a modest but meaningful boost to retirement income, along with important threshold and tax changes for current workers. But while COLA helps, it may not be enough on its own to keep pace with rising living costs, especially housing and healthcare. 

That’s why planning matters. At Allgood Financial, we believe in building long-term, multi-generational financial strategies that go beyond just the numbers. Social Security plays a vital role, but when combined with smart planning, disciplined saving, and thoughtful investing, it can be part of a legacy for you and your family. 

Your financial future is our business, and 2026 is another opportunity to get it right. Reach out for a meeting today. 

The content provided herein is based on our interpretation and is not intended to be legal advice or provide a tax opinion. This document is a summary only and not meant to represent all provisions within the Social Security changes.