Key Points Workers pay Social Security tax on their income. Some workers only pay taxes on part of what they earn. In 2026, Social Security taxes are going up for certain workers. The $23,760 Social Security bonus most retirees completely overlook › Social Security benefits are funded by taxes collected from workers. As you work and earn income, you pay taxes into the system. The income you earn and the taxes that you pay earn you work credits, and if you earn at least 40 work credits, then you q ...

Core Insights - The Social Security program is undergoing constant changes that impact both current recipients and future workers [1] Group 1: Cost-of-Living Adjustments and Changes - The annual cost-of-living adjustment (COLA) is a significant change that results in increased monthly benefits, but there are additional changes that may affect out-of-pocket costs for some individuals [2] - The wage base limit for Social Security payroll taxes will increase to $184,500 in 2026, up from $176,100 in 2025, meaning some workers will pay more in taxes as more of their income falls below this limit [5][9] Group 2: Tax Implications - For example, an individual earning $180,000 in 2025 would have $3,900 exempt from the tax, but in 2026, all of that income would be subject to the tax, resulting in an additional tax burden of $241.80 for employees and $483.60 for self-employed individuals [6] - The wage base limit is adjusted annually based on the national average wage index, which tracks changes in American workers' wages, making it important for individuals to monitor these changes to avoid unexpected tax bills [7] Group 3: Retirement Earnings Test - The retirement earnings test thresholds are increasing to $24,480 and $65,160, which is relevant for individuals claiming Social Security before reaching full retirement age [9][10]