With all the changes the Trump administration has been making, retirees have been particularly interested in the president’s plans for Social Security and battling inflation. Many hope Trump will lay out his specific strategy as soon as possible to help them with planning their finances for the future.
While the debates continue over how to fund Social Security in the years to come and how to help retirees and other consumers deal with rising prices, there are already indications of three big ways the Trump economy could affect Social Security in 2026.
Future Funding
Given the talk over the past year about a bleak future for Social Security, retirees may be concerned about how long their benefits will continue and how the program will be funded in the coming years.
As of now, Social Security trust funds are projected to be depleted by 2033, at which point tax revenues will only cover approximately 77% of scheduled benefits. While the program will not run out of money entirely, congressional action, such as increasing payroll taxes, raising the retirement age or reducing benefits, is needed to prevent a roughly 23% to 24% benefit cut.
Such cuts would be devastating financially for those living solely off of Social Security or a tight fixed income in retirement. It’s unclear at this point what Trump plans to do about that possibility, if anything.
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Cost-of-Living Adjustments
Social Security recipients received a 2.8% cost-of-living adjustment (COLA) for 2026, triggered by inflation. This raised the average monthly retirement benefit from $2,015 to $2,071. However, Medicare Part B premiums rose by $17.90, absorbing part of that increase for many retirees.
Financial planners and retirees may be closely watching any moves by the Trump administration when it comes to future COLA amounts. Be sure to watch those adjustments carefully to better plan for your financial future. Keeping up with changes in the laws that may affect benefit levels can help prompt you to diversify savings or purchase annuities to act as financial buffers.
The Ripple Effect of Increasing Full Retirement Age
Starting in 2026, the full retirement age (FRA) officially reaches 67 for all workers born in 1960 or later. As this is now the age at which you can receive 100% of your Social Security benefit, retiring earlier at the former standards of age 65 or 66 reduces your benefits permanently.
If you work before reaching full retirement age and collect benefits, you face the earnings test. Those limits increased in 2026, which means if you are under FRA all year, you can earn up to $24,480 before benefits are withheld (up from $23,400 in 2025). You should also note that Social Security withholds $1 for every $2 earned above the limit.
However, if you reach FRA in 2026, you can earn up to $65,160 before benefits are affected.
At this point, Social Security withholds $1 for every $3 above the limit.
The amount of income subject to Social Security payroll taxes has also increased from the 2025 cap of $176,100 to the new 2026 cap of $184,500. This means high-income workers pay Social Security taxes on more of their wages.
Unfortunately, you’ll now also need to earn more to get work credits. Because you need 40 total credits to qualify for Social Security, you’ll now need to earn $1,890 per work credit (increased from $1,810 last year), and you can earn a maximum of four credits per year. This change to benefits mostly affects part-time workers and gig workers.
Chris Adam contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: 3 Ways the Trump Economy Could Affect Your Social Security in 2026
