3 Important Things to Know About Social Security in 2026

For many people, the start of a new calendar year is a good time to get their finances in order. Part of that could mean setting up a household budget, making a plan to eliminate debt, and establishing a retirement savings goal, such as maxing out your IRA.

It's also a good time to see where things stand with Social Security. This holds true whether you're currently collecting benefits from the program or not.

Here are three key things to know about Social Security as 2026 kicks off.

Image source: Getty Images.

1. Rising Medicare costs could eat into your COLA

This month, seniors on Social Security will be getting a 2.8% cost-of-living adjustment, or COLA. But that raise may not go as far if you're also a Medicare enrollee.

Medicare enrollees pay their monthly Part B premiums out of their Social Security benefits directly. This year, the standard monthly Part B premium is rising from $185 to $202.90. That $17.90 increase could eat into your upcoming COLA, giving you a smaller boost than expected.

It's important to factor that into any budgeting you're doing in January, so your numbers aren't thrown off. You should also factor in costs you might face due to changes in your Medicare Advantage or Part D plan. For example, if a drug you take is being moved into a higher tier, your co-pays may be increasing.

2. If you're turning 66, you may not want to claim benefits just yet

For many years, people turning 66 could claim Social Security without worry. That's because 66 was the program's full retirement age for a long time, which meant seniors could collect their monthly benefits without a reduction.

But full retirement age has been gradually increasing. And for people born in 1960 or later, it's 67. This means that you're turning 66 in 2026, you may not want to sign up for Social Security right away.

Although you can claim benefits at any point starting at age 62, every month you file ahead of full retirement age reduces those monthly payments permanently. If you file for Social Security a year early, you'll face a roughly 6.67% reduction in your monthly checks.

That may not be a problem if you're bringing a large nest egg into retirement. If that's not the case, waiting could pay off.

3. The program may be one year closer to insolvency

Social Security shouldn't have a problem paying benefits in full in 2026. But you should know that the new year brings the program that much closer to a major financial crunch.

Social Security's Trustees say that the program's Old-Age and Survivors Insurance (OASI) Trust Fund will only be in a position to pay benefits in full through 2033. If lawmakers vote to combine the OASI Trust Fund with the program's Disability Insurance Trust Fund, Social Security will be able to pay benefits in full through 2034. At that point, though, broad cuts may be on the table.

Now, it isn't a given that Social Security will have to cut benefits. Lawmakers have different options they can look at to shore up the program's finances. Still, it's not a bad idea to prepare for potential benefit cuts if you're still working. That could mean boosting your savings rate at the start of 2026 so you have more of a future cushion in case you don't end up getting your Social Security checks in full once you retire.

Clearly, there's lots to know about Social Security as a new year begins. Keep these important points in mind, as they may influence some of the financial decisions you make in 2026.

The Motley Fool has a disclosure policy.