Upcoming Changes to Social Security Will Be Announced Soon - Yahoo/Finance
There are five major changes to Social Security that will be released on October 15th. The most anticipated of these is the cost-of-living adjustment (COLA). Social Security has automatically adjusted COLA each year since 1975. From 1975 to 1982, COLA was based on the second quarter of the year and applied in July. Beginning in 1983, it was changed to the third quarter, with the inflation adjustment applied in December. Social Security compares inflation for July, August, and September of the current year to the same three months of the prior year. The current estimate is 2.7%, but it may increase to 2.8%.
The wage cap is also expected to increase. Social Security obtains most of its funding from payroll taxes, but there is a limit on how much you can be taxed on. Higher earners can expect to pay taxes on a higher amount of their wages next year. The current estimate for 2026 is $183.600, up from the current cap of $176,100 in 2025.
The earnings limit is also expected to rise, which will allow someone who takes their Social Security benefits before their full retirement age (FRA) to earn slightly more before Social Security starts withholding $1 for every $2 you go over. The current limit for 2025 is $23,400.
The maximum benefit someone can earn also tends to increase each year. The maximum benefit for someone reaching their FRA in 2025 is $4,018. To earn the maximum amount, you need to work for 35 years and earn the maximum amount, subject to payroll tax..
The amount needed to earn the 40 work credits to qualify for Social Security will be higher. The amount is currently $1,810 per quarter in 2025. You can earn all four credits for the year in one quarter if you earn at least $7,240.
Even if you are not yet ready to retire or receiving Social Security, it is still important to watch for Social Security updates, as changes could be made that will affect your paycheck. Read the full article by Maurie Backman of The Motley Fool here…
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