3 Big 2026 Updates Could Impact How Much of Your Social Security Benefits You Get to Keep

Social Security is the foundation of many Americans' retirement, and it's never been more important than it is today. In an annual Gallup Poll, 62% of retirees said their monthly payments are a major source of household income, the highest response rate ever recorded by the pollster dating back to 2002. As such, keeping as much of your Social Security payment as possible can make a huge difference in how much you enjoy your retirement.

But several major changes going into effect in 2026 could impact exactly how much of your benefits you get to keep when all is said and done. Being aware of how they could impact your monthly payment could drastically affect your budgeting and planning for the year. Here are three of the biggest updates that could change how much you get to keep from Social Security.

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1. Medicare Part B premiums are going up

You become eligible for Medicare starting at age 65. If you're already enrolled in Social Security at least four months before your 65th birthday, the government will automatically enroll you in Part A (hospital insurance) and Part B (medical insurance).

Importantly, Medicare enrollees have to pay a monthly premium for Part B. If you receive Social Security every month, the government will deduct those premiums from your payment before sending it to you.

The government makes annual adjustments to the pricing for Part B with the aim of fully covering the costs of providing the insurance to seniors. For 2026, it raised the monthly premium most people will pay by $17.90 to $202.90. That's a 9.7% increase, which drastically outpaces the 2026 cost-of-living-adustment (COLA) of 2.8%. As a result, many seniors will see a decrease in the buying power of their monthly Social Security benefits once Medicare premiums are deducted.

For those with small Social Security benefits, there's a harmless provision that prevents the increase in Medicare premiums from reducing your monthly payment from one year to the next. You'll have to have already been a dual enrollee in Social Security and Medicare last year, however, if you want to benefit from the provision.

2. You can earn more without reducing your benefits

Many seniors are increasingly reliant on Social Security to make up the bulk of their budgets, and some have found the need to continue working while collecting benefits. But earning over a certain threshold at your job can curb the amount you receive each month from the government. That's due to a rule called the retirement earnings test.

The earnings test applies to anyone collecting Social Security before reaching full retirement age. It reduces your total annual payments from Social Security by $1 for every $2 you earn from working over a certain threshold. The threshold is higher in the year you reach full retirement age, and the reduction is only $1 for every $3 you go over.

The earnings test limit increases annually. In 2026, you can earn up to $24,480 before experiencing a reduction in benefits. That's up from $23,400 last year. (The higher limit for those reaching full retirement age this year is $65,160, up from $62,160.)

The good news is that any reduction in your benefits this year (or previous years) from the earnings test isn't lost for good. Once you reach full retirement age, the Social Security Administration will recalculate your monthly benefit based on the amount withheld due to the earnings test. For every month's worth of benefits withheld, it'll calculate your new benefit as if you had delayed your Social Security application by one month. What's more, the earnings test no longer applies once you reach full retirement age, so you can keep working and receive your full benefit.

3. You could pay less in taxes on your Social Security benefits

When President Donald Trump campaigned ahead of the 2024 election, he promised to eliminate taxes on Social Security. The tax law enacted last year doesn't exactly do that, but it offers seniors a major tax break that could reduce the amount you pay in taxes on your benefits.

First, it's important to note that Social Security benefits are taxed based on a metric known as combined income. Combined income is the sum of your adjusted gross income, any untaxed interest income, and half your Social Security benefits. If it exceeds a certain level, a portion of your benefits are included as taxable income in your tax return.

Those thresholds have remained the same for over 40 years, with no inflation adjustments. As a result, many seniors are finding more and more of their benefits fall into taxable territory.

The new tax law, however, provides seniors age 65 and over with an additional deduction of up to $6,000 per individual, starting with the 2025 tax year (due in April of this year). To qualify for the full deduction, you'll need a modified adjusted gross income less than $150,000 for joint filers or less than $75,000 for individuals. While it won't reduce your adjusted gross income, it can completely offset the taxable portion of Social Security benefits for some households.

It's worth noting that you don't need to be collecting Social Security to receive the deduction; it's available to all seniors age 65 and older.

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