What's changing for retirement savers and retirees in 2026
Kerry Hannon ·
Senior Columnist
Updated
Sat, December 20, 2025 at 9:30 AM EST
7 min read
The new year will usher in myriad retirement-related changes for both savers and retirees.
Here’s a roundup of the top retirement-related changes for 2026.
Retirement account contribution limits
The amount you can squirrel away for your golden years will inch up modestly. The contribution limit on individual retirement accounts (IRAs) increases to $7,500, and the catch‑up contribution limit for people 50 and older goes to $1,100 for 2026.
The limits apply to both traditional and Roth IRAs, though Roth IRA eligibility depends on income levels. For Roth IRAs the income limit range for contributing will increase slightly to between $153,000 and $168,000 for singles and heads of household. For married couples filing jointly, the range increases to between $242,000 and $252,000.
For 2026, you’ll be able to add a tad more to your 401(k), 403(b), 457 plans, and the federal government's Thrift Savings Plan. The contribution limit increases to $24,500, up from $23,500. There is an $8,000 catch-up if you’re 50 or older.
Folks who are 60 to 63 can contribute an additional $11,250 in 2026 in lieu of the $8,000, if your plan allows.
One caveat: In 2026, a provision in the Secure 2.0 retirement legislation kicks in that mandates higher earners who are 50 and older and earn more than $150,000 make catch-up contributions on an after-tax basis in a Roth option in their employer-sponsored retirement plans.
If your employer’s plan doesn’t offer a Roth 401(k) account, one solution: Contribute your catch-up amount to a Roth IRA if your income is below the IRS income threshold.
Read more: These are the traditional IRA and Roth IRA limits in 2026
Health savings accounts
Contribution limits to health savings accounts or HSAs — a key retirement tool — are also increasing.
The new 2026 annual limit for individuals will be $4,400. For family coverage, the HSA contribution limit rises to $8,750, with an additional $1,000 catch-up contribution for those 55 or older.
I’m a fan of these accounts for those who can invest the contribution rather than use it for current medical bills. You put money in on a tax-free basis, it builds up tax-free, and it comes out tax-free for qualified healthcare expenses. One rule: You must be enrolled in a high-deductible healthcare plan (HDHP) in order to contribute to an HSA. You can also open an account as a self-employed freelancer or business owner if you have a qualified HDHP.
Read more: HSA contribution limits for 2026: Here’s how much you can save
Social Security benefits
The Social Security Administration announced a 2.8% cost-of-living adjustment (COLA) for 2026. Starting in January, the increase will add an average of $56 per month for 75 million retired seniors and disabled workers who have struggled with higher prices this year.
Story Continues
Read more: How to find out your 2026 Social Security COLA increase
Medicare premiums
Medicare premiums are also jumping up in 2026, putting a damper on that increase in retirees' Social Security checks.
The Centers for Medicare & Medicaid Services announced that 2026 monthly Part B premiums will climb to $202.90, an increase of $17.90 this year. And the annual Part B deductible, which most people must pay before their Medicare coverage begins, will rise by $26 in 2026, to $283.
The agency also announced other 2026 Medicare cost increases, including high-income surcharges. Since 2007, a beneficiary’s Part B monthly premium has been based on his or her income. About 8% of Medicare users earn too much to qualify for the standard Part B and Part D premiums and must pay the surcharges.
In 2026, Medicare beneficiaries with an income exceeding $109,000 for single filers and $218,000 for joint filers will pay the surcharge. For these beneficiaries, total monthly Part B premiums will range from $284.10 to $689.90.
Calculations have a two-year lag time. Whether you pay a surcharge in 2026 depends on the income shown on your 2024 tax returns.
Medicare Advantage changes
For 2026, some Medicare Advantage insurers are dumping plans, hospital systems, and doctors, scaling down benefits and raising out-of-pocket costs, including deductibles.
Medicare’s online searchable Plan Finder on the Medicare.gov site allows you to review Medicare Advantage plan options, details about supplemental benefits, and the names of doctors and hospitals in the plans’ networks.
If you start the year and discover you are unhappy with your Medicare Advantage plan, you can make a switch. Medicare Advantage open enrollment runs from Jan. 1 until March 31.
During that time, Medicare Advantage enrollees can switch plans or transfer to original Medicare. You cannot, however, jump from a traditional Medicare plan to a Medicare Advantage one. You’ll have to wait for the fall enrollment period for that.
Read more: Medicare open enrollment: How to add or adjust your coverage
Medicare-negotiated prescription drugs
Here’s some good news: Out-of-pocket costs for the first 10 Medicare-negotiated prescription drugs will fall by an average of more than 50% for people in standalone Part D plans when the negotiated prices take effect on Jan. 1. The drugs are used by nearly 9 million Medicare seniors and treat conditions including diabetes, heart disease, autoimmune disorders, and cancer.
Potential Social Security office closures
In the coming year, the Social Security Administration is reportedly planning to close droves of field offices, which provide in-person help to folks applying for benefits, getting their Social Security cards, and more.
Keep in mind that you can access many SSA services online if you have a My Social Security account. You can also call 1-800-772-1213, which connects you with automated services.
Have you reached your full retirement age?
In 2026, full retirement age (FRA) goes up again. In November 2025, the FRA — the age at which you qualify to receive 100% of your Social Security benefits — increased to 66 years and 10 months for those born in 1959. Next November, the FRA will reach 67 for those born in 1960 or later, marking the end of the 42-year-long shift in raising the retirement age from 65 to 67.
You can start collecting retirement benefits before your FRA, at age 62, but your monthly check will be permanently reduced by as much as 30%. If you can delay tapping your benefits from your FRA until age 70, you’ll earn delayed retirement credits. Those come to roughly an 8% annual increase in your benefit for each year until you hit 70. The credits stop accruing at that point, but the heftier checks remain for the rest of your life.
Read more: What is the average retirement savings by age?
Social Security and your earnings
The wage cap subject to Social Security tax goes up to $184,500 from the 2025 limit of $176,100, meaning higher earners will pay Social Security tax on more income.
For those working while collecting Social Security, there is a modest increase in the income level where benefits are withheld temporarily.
If you continue to work after claiming Social Security benefits before your FRA, a portion of your benefits is withheld if you earn over a certain threshold. That threshold is $24,480 in 2026, up from $23,400 in 2025.
In the year you hit full retirement age, that limit increases threefold, and in the month you hit full retirement age, the annual earnings test ends. From that point on, you can earn without your benefits being curbed, and while you don’t get the amount you forfeited previously in a lump sum, your monthly benefit is adjusted upward so you will recoup all the money that was withheld. Use this calculator on the SSA website to walk through the calculation.
Special senior deduction
A new provision under the One Big Beautiful Bill Act: If you’re 65 or older, you will be able to take advantage of a temporary $6,000 deduction on your income taxes. The deduction will be available to both itemizers and non-itemizers, and it doubles to $12,000 for married couples filing jointly, assuming both partners are 65.
One caveat: For higher-income seniors, income limits apply. The deduction is reduced for single filers with incomes of more than $75,000 and married couples filing jointly with income over $150,000, eventually phasing out.
For non-itemizers, this extra deduction is in addition to the standard deductions: $16,100 for single filers and $32,200 for married couples filing jointly.
Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including "Retirement Bites: A Gen X Guide to Securing Your Financial Future," "In Control at 50+: How to Succeed in the New World of Work," and "Never Too Old to Get Rich." Follow her on Bluesky and X.
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