Social Security recipients have received a 2.8% increase in their monthly benefits, effective January 1. The adjustment is intended to offset inflation.
The wage base limit, which caps income subject to payroll tax, has increased by $8,400 to $184,500. Higher earners will pay more in taxes as a result.
Early claimers who work can now earn more before facing the retirement earnings test. For those not reaching full retirement age in 2026, the limit is $24,480, up from $23,400. Exceeding it reduces benefits by $1 for every $2 over.
For individuals hitting full retirement age in 2026, the limit is $65,160, up from $62,160. Benefits are reduced by $1 for every $3 earned above that amount. Reduced benefits are withheld until full retirement age, not permanently lost.
The Social Security Administration sets the annual cost-of-living adjustment based on Consumer Price Index data. The CPI-W average for the third quarter of 2025 was 2.76% higher than 2024, leading to the 2.8% figure.
To qualify for maximum retirement benefits, individuals must earn at least the wage base limit in the 35 years used for calculations. For 2026, that amount is $184,500.