Key Points
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Social Security is a dynamic program, with changes undertaken on a near-annual basis.
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An executive order from President Trump will completely alter how benefits are paid to more than 500,000 beneficiaries.
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Five additional Social Security changes are expected when the calendar turns to 2026, including a potentially record-setting (for this century) cost-of-living adjustment.
For the more than 53 million retired workers currently receiving a Social Security benefit each month, this payout isn’t a luxury. According to 24 years of polling from Gallup, between 80% and 90% of retirees lean on their Social Security income, to some varied degree, to cover their expenses.
For nine decades, Social Security has laid a financial foundation for aging workers who could no longer provide for themselves. It’s also expanded its coverage to include workers with disabilities and survivors of deceased workers.
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But this cherished program isn’t static. Changes are made on a near-annual basis.
Come Sept. 30, Social Security will change forever, courtesy of President Donald Trump. Meanwhile, five additional Social Security changes are a virtual certainty to take place once the calendar changes to 2026.
President Trump speaking with reporters. Image source: Official White House Photo.
A Trump executive order is making a permanent change to Social Security
Since Trump’s inauguration for his second non-consecutive term, he’s overseen a flurry of indirect changes to Social Security. This includes the Social Security Administration (SSA) announcing 7,000 job cuts to reduce its operating expenses, as well as the beefing up of personal identification methods.
Most beneficiaries are no longer able to change their direct deposit information or sign up for benefits over the phone. Rather, these actions must be done in-person or via a “my Social Security” account online with two-factor authentication.
But one Social Security change comes directly from the president. On March 25, Trump signed an executive order (“Modernizing Payments To and From America’s Bank Account”) that eliminates paper-based payments from the federal government by Sept. 30, 2025. In other words, Social Security benefits paid by paper check will cease in a matter of weeks.
This move is meant to reduce the possibility of Social Security scams, and to save America’s leading social program money. Whereas an electronic fund transfer costs the U.S. government less than $0.15, each paper check issued runs the federal government about $0.50. With more than 500,000 Social Security beneficiaries still receiving a paper check, ending this policy will save the program more than $2 million annually.
The beneficiaries still receiving a paper check will need to set up direct deposit with their bank or use a Direct Express card. The latter is a prepaid debit card where federal benefits can be deposited.
But this is far from the only change headed the way of Social Security’s nearly 70 million traditional beneficiaries. Five additional changes can be penciled in when the calendar turns to Jan. 1.
1. Social Security beneficiaries are due for a raise
The most anticipated change of the new year is bound to be the cost-of-living adjustment (COLA), which is scheduled to be revealed on Oct. 15. Social Security’s COLA is the “raise” beneficiaries receive most years to counteract the effects of inflation (rising prices).
Following data from the July inflation report, two independent Social Security forecasts have converged. Nonpartisan senior advocacy group The Senior Citizens League, and independent Social Security and Medicare policy analyst Mary Johnson, believe that the 2026 COLA will come in at 2.7%. If accurate, this would mark the first time this century five consecutive cost-of-living adjustments reached at least 2.5%.
Though these estimates are subject to change, a 2.7% COLA would translate into an extra $54 per month for the average retired worker, and provide a $43-per-month boost to the average worker with disabilities and survivor beneficiary, respectively.
Just keep in mind that the Medicare Trustees Report projected a scorching-hot 11.5% increase in the Part B premium next year, to $206.20 per month. When coupled with stubbornly high shelter and medical care services inflation, there’s a high likelihood of most beneficiaries losing purchasing power on their Social Security income in 2026.
Image source: Getty Images.
2. The rich are a virtual lock to get richer
Speaking of raises, the maximum monthly Social Security benefit at full retirement age is nearly certain to increase in the upcoming year.
This year, the maximum monthly payout at full retirement age is $4,018, which represents a $196-per-month increase from 2024. Though it’s unclear if we’ll witness a similar year-over-year percentage increase, the maximum monthly benefit for lifetime high earners should climb.
Only around 2% of all beneficiaries qualify for this maximum monthly payout, for which three criteria must be met:
- They must wait until their full retirement age before claiming their retired-worker benefit.
- They’ll need to have at least 35 years of qualifying work history.
- They’ll need to have met or surpassed the maximum taxable earnings cap in all 35 years taken into account by the SSA when calculating their monthly benefit.
3. High-earning workers are nearly certain to owe more
On the flipside, high-earning workers can expect to open their wallets a bit wider in 2026.
In 2025, all earned income (wages and salary, but not investment income) between $0.01 and $176,000 is subject to the 12.4% payroll tax, with any earnings above this amount exempted.
The $176,100 figure is the maximum taxable earnings cap, and it tends to increase most years in lockstep with the National Average Wage Index (NAWI). Pretty much the only time the taxable earnings cap doesn’t increase is when no COLA is passed along. With a 2.7% COLA forecast for 2026, it’s a practical lock that the 6% of workers who earn above $176,100 annually will owe more next year.
4. Early filer withholding thresholds should climb
Social Security beneficiaries who chose to collect their benefit early and haven’t yet reached their full retirement age can expect withholding thresholds to be adjusted in the new year.
According to the retirement earnings test, the SSA can withhold some or all of your benefit if you earn too much and filed for your benefit early. For instance, workers who are collecting a benefit and won’t reach their full retirement age in 2025 can have $1 withheld for every $2 in earned income above $23,400 ($1,950/month).
Meanwhile, early filers who will reach their full retirement age in 2025 can bring home $62,160 ($5,180/month) in earned income before $1 in benefits is withheld for every $3 in earnings above this threshold.
Both of these income thresholds should increase in 2026 and allow early filers to earn a bit more before withholding kicks in.
5. Disability income thresholds can increase, too
Workers receiving Social Security disability income can expect the thresholds for ongoing payouts to rise, as well.
As an example, non-blind and blind workers receiving disability income were allowed to earn up to $1,620 per month and $2,700 per month in 2025, respectively, without having their benefits stopped.
These thresholds, commonly referred to as the substantial gainful activity limit, also adjust in lockstep with the NAWI. As long as Social Security’s cost-of-living adjustment is positive, which signals that prices are, collectively, rising, the thresholds governing continued disability payments should climb, too.
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