For millions of older Americans, Social Security is a financial lifeline.
The program is the country’s largest social safety net program, providing monthly payments to nearly 74 million people. Business Insider has heard from hundreds of seniors living check to check without retirement savings and 80-somethings working to supplement their Social Security income.
Here’s what you need to know about benefits heading into the new year.
Who will qualify for Social Security in 2026
Americans pay into Social Security throughout their careers. The program is largely funded by payroll taxes, and each individual’s monthly checks are based on the income they made during their working years. Qualification rules will remain unchanged in January.
Older adults must be at least 62 years old to enroll in the program — but those who enroll before full retirement age typically receive smaller checks and may experience benefit deductions if they’re still employed.
The national retirement age is 66 or 67 for most baby boomers, which is the age that beneficiaries can collect their full Social Security amount. And those who delay filing for benefits until age 70 will receive the highest monthly allotment.
Depending on income and filing age, Social Security beneficiaries typically take home between $800 and $3,000 a month. Widows and widowers can claim benefits based on their spouses’ income.
The Social Security Administration also offers benefits for low-income Americans and those with disabilities at any age. Supplemental Social Security is generally available for individuals earning less than $2,000 a month, roughly 130% of the federal poverty line. Social Security Disability provides monthly payments to people experiencing at least one year of disability that affects their ability to work.
Beneficiaries will see higher checks to keep up with inflation
Social Security beneficiaries will receive about $60 more monthly in 2026, thanks to the program’s annual cost-of-living adjustment. That 2.8% increase is based on third-quarter inflation data.
The latest COLA announcement, tied to year-over-year increases in the consumer price index, mirrors the past several years. Raise percentages skyrocketed during high pandemic-era inflation, but have hovered around 2% and 3% since 2023.
Older Americans have told Business Insider that, while this COLA raise helps cover the rising cost of groceries, rent, and healthcare, it can present another problem. Low-income retirees often rely on other aid programs like Supplemental Nutrition Assistance and Medicaid. This slight cost-of-living raise can push some older adults over the qualifying threshold for those other aid programs, so lower-income retirees should carefully check those criteria.
Social Security income will still be taxed
Social Security income is typically taxed. Depending on household income, Americans may pay taxes on up to 85% of their Social Security payments.
Those who take home less than $25,000 as an individual and $32,000 as a couple, however, will not have their benefits taxed. Need-based Supplemental Social Security also isn’t subject to tax.
Under President Donald Trump’s One Big Beautiful Bill Act — signed in July — taxpayers 65 and older can claim up to $6,000 in addition to their normal standard deduction. This new rule is set to last through 2028 and builds off of an existing tax exemption for seniors.
In practice, this means that older Americans filing their 2025 tax returns can write off as much as $23,750. Joint filers over 65 will be able to claim as much as $46,700.
Out-of-pocket Medicare costs will rise
Most Social Security beneficiaries are also enrolled in Medicare, a federal health insurance program available to Americans over 62 and some people with disabilities. Open enrollment began in November and ends December 7.
The program’s structure will not change in the new year, but beneficiaries can expect higher out-of-pocket costs because the price of US healthcare is climbing and more baby boomers are needing care as they age. Premiums for Medicare Part B plans will jump by about 10%.
Medicare has four main plan types. Parts A and Part B are standalone insurance plans that cover inpatient and outpatient care; Medicare Advantage allows older Americans to join private plans governed by Medicare rules and out-of-pocket caps; and Part D is typically supplemental insurance that covers prescription drugs and basic provider visits.
Medicare is based on age and Medicaid is based on income, so some Americans qualify for both insurance programs.
The Social Security fund is in jeopardy
America’s Social Security fund is expected to become insolvent in the mid-2030s. This doesn’t mean checks will stop entirely, but retirees could see smaller benefit amounts unless Congress secures more money. Social Security is supplemented by the federal government, even though individuals pay into the program throughout their careers.
Programs like Medicare, Medicaid, and SNAP that some older Americans rely on are funded separately from Social Security and will not be impacted.