We are nearing the end of the first month of the new year, so for retired Americans who are seeing changes in their Social Security benefits — and for workers still wondering about new 401(k) plan adjustments for 2026 — it’s worth taking the time to review them.

One important note is that Social Security beneficiaries saw their payments rise by 2.8 percent in January as the annual cost‑of‑living adjustment (COLA) took effect, according to the Social Security Administration (SSA).

The Social Security Administration estimates that the average monthly retirement check has grown by about $56, moving from $2,015 to $2,071, the SSA explained. Survivor benefits for widowed spouses also increased by roughly $52 — from $1,867 to $1,919.

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“The 2026 COLA reflects changes in prices for a set of consumer goods and services from the third quarter of 2024 to the third quarter of 2025, as measured by a federal price index,” according to AARP.

“Inflation ticked up over that time, resulting in a slightly higher increase compared with 2025’s 2.5 percent COLA.”

People receiving retirement, family, survivor, or Social Security Disability Insurance (SSDI) benefits saw the COLA increase reflected in their January payments, AARP wrote.

Those who receive Supplemental Security Income (SSI) — a program for adults 65 and older, as well as people who are blind or have a disability and have very limited income and resources — received their first inflation‑adjusted payment on Dec. 31.

“The COLA’s impact on beneficiaries’ purchasing power will depend largely on inflation trends in 2026,” AARP wrote. “If inflation cools, the 2.8 percent benefit increase could provide retirees with a modest financial cushion. But if prices continue to climb, the COLA may leave beneficiaries struggling to manage their expenses.”

AARP clarifies Social Security full retirement age

Under legislation enacted by Congress in 1983, the full retirement age (FRA) for Social Security — the point at which someone can receive their entire benefit based on lifetime earnings — has been gradually rising from 65 to 67, depending on birth year.

“That drawn-out change is nearly complete,” AARP wrote.

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For anyone born in 1960 or later, the FRA is set at 67-years-old. Those born in 1959 have an FRA of 66 years and 10 months.

People with birthdays between March 2, 1959, and Jan. 1, 1960, will reach their full retirement age in 2026.

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How Social Security earnings limits changed in 2026

  • Claiming Social Security retirement benefits before full retirement age can lead to a temporary reduction in payments if your yearly work income goes over a set limit. (Source:AARP)
  • For individuals who will reach full retirement age after 2026, the earnings limit for 2026 is $24,480 (up from $23,400 in 2025). Social Security withholds $1 in benefits for every $2 earned above that amount. (Source: SSA)
  • For those who will reach full retirement age during 2026, the higher earnings limit is $65,160 (up from $62,160). In this case, the reduction is smaller: $1 withheld for every $3 earned over the limit. (Source: SSA)
  • After you attain full retirement age, the earnings test no longer applies. You receive your full monthly benefit regardless of work income, and the SSA adjusts your benefit to account for any amounts previously withheld. (Source:AARP)

AARP explains 2026 401(k) contribution limit changes

With a traditional 401(k) plan, an employer will deduct an employee’s pretax contributions from their paycheck, and the employee’s savings will be tax-deferred until they make withdrawals during retirement.

With a Roth 401(k), employee elective contributions are made with after-tax dollars and from which withdrawals in retirement are tax-free, according to the Internal Revenue Service (IRS).

“Thanks to some recent adjustments by the Internal Revenue Service, you can build that nest egg even bigger in 2026,” wrote AARP.

Savers under age 50 can put up to $24,500 into a 401(k) in 2026, an increase from the $23,500 limit in 2025, according to AARP.

For most workers 50 and older, the standard catch‑up allowance rises to $8,000 — up from $7,500 — bringing their total possible contribution to $32,500.

People who are 60, 61, 62, or 63 qualify for an even larger catch‑up amount. They can contribute an extra $11,250 to their workplace plan, allowing for a maximum of $35,750.

This enhanced catch‑up tier stems from the SECURE 2.0 Act, a 2022 law aimed at strengthening retirement savings.

“Those increases are good news for retirement savers,” wrote AARP’s John Waggoner. “As pensions become less common, especially in the private sector, most workers will rely on the proceeds of their retirement savings, plus Social Security, for the bulk of their retirement income.”

AARP’s advice on how to start a 401(k)

  • If contributing the full allowable amount isn’t realistic, put in whatever fits your budget and aim to raise that figure each year. Contributing pretax dollars to a 401(k) often reduces your take‑home pay by less than expected because of the tax break. (Source:AARP)
  • Consider a worker earning $50,000 annually and paid every two weeks. A 5% contribution would equal $96 per paycheck, but take‑home pay would drop by only $77, assuming a 15% federal tax rate and a combined 5% state and local rate. (Source:Charles Schwab)
  • Increasing the contribution to 6% would boost monthly savings to $115, while reducing each paycheck by about $92. (Source:AARP)
  • Many employers offer matching contributions, which effectively adds extra money to your retirement savings and can significantly increase your final balance. (Source:AARP)
  • For example, a 50‑year‑old earning $50,000 who contributes 5% of salary each year and receives 3% annual raises would accumulate $77,882 by age 65, assuming a 7% yearly return. (Source:AARP)
  • If that same worker receives a 50% employer match on contributions up to 5% of salary, the projected balance rises to $116,825. (Source:AARP)

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