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Group 1 - Social Security is a crucial source of retirement income for millions, and understanding its rules and changes is essential for retirees [1] - In 2026, Social Security benefits will receive a 2.8% cost-of-living adjustment (COLA), which is slightly higher than the 2.5% increase in 2025, but may not significantly help due to rising costs [2][3] - Medicare Part B costs are increasing, which will reduce the impact of the COLA on retirees' monthly benefits [3] Group 2 - Tariff policies may contribute to rising prices, potentially causing the 2.8% COLA to lag behind inflation, although they could also lead to lower inflation if they slow down spending [4] - Retirees relying heavily on Social Security should consider backup plans, such as reducing expenses or seeking part-time work, in case the COLA does not provide sufficient support [5] Group 3 - Seniors can now earn more income without risking withheld benefits once they reach full retirement age, allowing for greater financial flexibility [6] - The earnings-test limit for those under full retirement age has increased to $24,480 in 2026, up from $23,400 in 2025, meaning that earnings above this threshold will result in $1 in benefits being withheld for every $2 earned [8]

Core Insights - Timing is crucial when claiming Social Security benefits, and the optimal time varies based on individual circumstances [1] Group 1: Claiming Timing - Claiming Social Security benefits earlier than necessary can lead to significant reductions in monthly payments, with a potential decrease of up to 30% if claimed at age 62 [3] - Delaying benefits until age 70 can increase monthly checks by up to 24% due to delayed retirement credits [3][4] Group 2: Financial Considerations - A significant portion of retirees, over 38 million or approximately 63% of adult recipients, rely on Social Security for at least half of their income [2] - The Social Security Administration (SSA) implements an earnings test that reduces benefits by $1 for every $2 earned above $24,480 in 2026, and $1 for every $3 earned above $65,160 in the year of reaching full retirement age [6] Group 3: Spousal Considerations - For married couples, the optimal strategy is to delay claiming the higher earner's benefit until it maximizes close to age 70, while the lower earner can claim benefits starting at age 62 if needed [7][8]