3 Ways the New Social Security Rules Could Impact Middle Class
Written by
Jamela Adam
Edited by
Zuri Anderson
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Social Security is one of the most successful anti-poverty programs in the country, with millions of people receiving Social Security Disability Insurance (SSDI) benefits and federal Supplemental Security Insurance (SSI).
But upcoming regulatory changes could reshape the program in ways that particularly impact the middle class, especially older adults and those still in the workforce.
Tougher Eligibility Rules for Disability and Benefits
A proposed shift that could affect the middle class is the tightening eligibility rules for disability and other Social Security benefits. According to The Washington Post, the Trump Administration may soon propose changes to age-related eligibility rules for disability benefits. The proposed plan could raise the age threshold from 50 to 60 or potentially eliminate age as a factor altogether. This could entirely change how disability claims are assessed.
For middle-class workers who are disabled and aren’t able to work in their 50s or early 60s, tougher eligibility rules mean they might have to keep working longer or dip into personal savings earlier than planned. Both scenarios carry long-term financial risks, especially for those who are already struggling to build retirement savings.Â
Higher Payroll Taxes for Workers
If you’re still in the workforce, the new Social Security rules could also mean higher payroll taxes. The Social Security Administration on Oct. 10 unveiled a higher threshold for earnings subject to Social Security payroll taxes, also known as the taxable maximum or wage base.Â
For 2025, the maximum taxable earnings are $176,100, up from $168,600 in 2024. That number will continue to climb higher in 2026, which means more revenue collection for Social Security, and more middle-income earners will see a larger share of their paychecks go toward Social Security.
Smaller Net Benefit Increases After Medicare Premiums
The 2026 Social Security cost-of-living adjustment (COLA) was set at 2.8%, only slightly higher than last year’s 2.5% increase. For the average retiree receiving a monthly benefit of $2,008, according to the Social Security Monthly Statistical Snapshot, that’s around an extra $56 per month.
But a large chunk of that increase may never reach beneficiaries’ pockets. Medicare Part B premiums are expected to rise to $206.50 per month, up by $21.50, marking the largest dollar increase since 2022. Because Part B premiums are automatically deducted from Social Security payments, this increase would reduce the average retiree’s net benefit gain to only $32.7 per month.
Having nearly 40% of a COLA increase absorbed by Medicare premiums leaves middle-class retirees with less financial breathing room for everyday expenses.
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