Retirees and those nearing retirement should keep a close eye on changes in Social Security rules and tax laws, especially where they overlap. Here’s a look at a few key updates and tax changes listed by US Today that could immensely impact retirement planning.
Here’s what changes:
- As most years, the benefits have increased for the retirees through cost-of-living adjustments (COLAs). In 2026, the adjustment stands at 2.8% Accordingly, if you were receiving $2,000 per month last year, it would be now increase by $56 to $2,056 in 2026.
- The standard premium increases by 9.7%, i.e. it is increasing from $185 in 2025 to $202.90 in 2026. For many retirees, these premiums are automatically deducted from from their Social Security benefits. This means that their take-home payments could actually be lower than 2026.
- The maximum earnings that will be taxed for Social Security are up — from $176,100 in 2025 to $184,500 in 2026, the USA Today article points out. Hence, higher earners will have a greater share of their income taxed. Others will be taxed as usual.
- A total of 42 states now exempt Social Security benefits from taxation, up from 41 last year as West Virginia has been added to that list in 2026
- The recently introduced ‘’ introduced a $6,000 tax deduction for every eligible senior aged 65 and older. This mean that, even if you have to pay tax to the state, , this deduction can help offset the burden. It’s in effect from 2025 through 2028, and applies independently of Social Security income.
- It’s inaccurate to assume that Social Security is on the verge of collapse and will suddenly stop payments, However, the program is definitely under financial strain, and without Congressional intervention, its trust fund surplus will run out within a decade. If that happens, benefits won’t vanish for those who are eligible, but it is likely to reduce by 25%
