Many retirees rely on their Social Security checks to help them cover the bills. That’s why it’s so important to know of any upcoming changes that could affect the amount of benefits you get to bring home.

For some retirees, a change will come in 2026 that could leave them with less of their benefits to spend. Here’s what the potential change is, why it is an issue, and who needs to plan for it.

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Here’s why some retirees could lose some of their Social Security benefits in 2026

Retirees are at risk of losing some of their Social Security benefits next year, depending on where their income is relative to the threshold at which benefits become taxable. Under federal law, retirees pay taxes on their benefits once their income exceeds a specific amount.

• For married joint filers, up to 50% of their benefit can be taxed by the IRS once their provisional income hits $32,000. If their provisional income goes above $44,000, up to 85% of benefits could be subject to tax.
• For single tax filers, up to 50% of benefits could be taxed once provisional income hits $25,000. If it goes above $34,000, up to 85% of benefits could be taxed.

Provisional income is half of all Social Security benefits plus all taxable income and some non-taxable income, like MUNI bond interest.

Unfortunately, the number of retirees who exceed these thresholds will rise next year. This will happen because retirees are on track to get a cost-of-living adjustment (COLA) next year. COLAs cause benefits to increase so that retiree benefits keep up with the rate of inflation. COLAs are not a raise, because they don’t provide more buying power — but they give seniors more money in their checks.

The problem is, the threshold at which benefits become taxable is not indexed to inflation. This means some retirees will get more money, so they will cross that threshold and lose some of it to the IRS. The raise that was supposed to give them more buying power will cause them to be taxed more, leaving them in a worse position.

A growing number of retirees have faced this problem over the years

Social Security benefits first became subject to tax as a result of reforms in 1983. At the time, fewer than 10% of retirees were taxed on benefits. However, because the thresholds for taxation of benefits haven’t changed, the number is now around 50% and growing.

What’s more, the Senior Citizens League found that households affected by this tax now pay an average of $3,211 to the IRS. The large COLAs in recent years only exacerbated this issue, as seniors saw their checks rise substantially but didn’t gain buying power due to surging inflation. With retirees projected to get another benefits bump next year, the trend of more seniors losing money to taxes will continue.

This may not be an issue if President Donald Trump follows through on his pledge to eliminate tax on Social Security, but the future of this plan is unclear and, unless the law changes, retirees who are close to the threshold amounts will need to prepare to send money to the IRS next year instead of spending it on the things they may want or need.

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