There Is A Social Security Change in 2026 That Could Cost Retirees Thousands If They're Not Prepared

"Claiming at 62 instead of waiting until 67 permanently reduces your monthly benefit by roughly 30%. On a $2,000 monthly benefit, that is $600 less every month for the rest of your life. Over 20 years, that is $144,000 you never recover."

"If you claim before your full retirement age and continue working, you lose $1 in benefits for every $2 you earn above $22,320 in 2026. Say you claim at 63, receive $1,400 per month, and earn $40,000 from part-time work. You are $17,680 over the limit, which means Social Security withholds $8,840 in benefits, wiping out more than six months of payments."

"The 2.5% COLA for 2026 applies to your actual benefit amount. If you claimed early and locked in a permanently reduced benefit, that 2.5% increase applies to the smaller number. Someone receiving $1,400 per month gets a $35 raise. Someone who waited and receives $2,000 per month gets $50. That gap compounds every year."

For those born in 1960 or later, full retirement age is 67, not 65. Claiming at 62 instead of waiting until 67 permanently reduces monthly benefits by approximately 30%. The 2026 earnings limit of $22,320 penalizes early claimers who continue working, withholding $1 in benefits for every $2 earned above the limit. The 2.5% COLA adjustment for 2026 applies to actual benefit amounts, meaning early claimers receive smaller increases than those who waited. Healthcare costs have grown 6.9% through November 2025, significantly outpacing the COLA adjustment and creating additional financial pressure on retirees.

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