The Economic Times

A little-known federal tax could shrink your Social Security checks in 2026 heres how to prepare

Nearly 50% of retirees already pay federal income tax on Social Security benefits. That share is rising in 2026. The Social Security tax thresholds remain frozen at $25,000 and $32,000 since 1984. They are not indexed for inflation. COLA increases and 401(k) withdrawals push combined income higher. Up to 85% of benefits can become taxable. This tax bracket creep quietly reduces net retirement income and strains Social Security trust fund projections.