2 Social Security Changes for 2027 All Working Americans Need to Know About
When you think of Social Security, you probably picture retirees collecting their monthly benefits. And that’s understandable. You might also assume that when the Social Security Administration (SSA) announces changes to the program, it’s only retirees who need to pay attention.
But a recent round of Social Security changes affects working Americans just as much as it affects retirees. Here are two specific changes workers need to know about.
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1. There’s a new (higher) wage cap
Social Security gets the bulk of its funding from payroll taxes. Workers pay into the program at a rate of 6.2%, and employers must match that rate. Those who are self-employed have to cover the entire 12.4% Social Security tax on their own.
Each year, a wage cap is set to limit the amount of income subject to Social Security taxes. In 2026, that limit is $184,500, so earnings above that cap are exempt.
In 2027, the Social Security wage cap is rising to $192,300. Higher earners will owe taxes on an additional $7,800 of income.
For those footing the entire 12.4% bill themselves, that’s roughly an extra $967. Those splitting the bill with their employers will pay about $484 extra in the new year.
2. There’s a new work credit value
Work credits for Social Security may not be something you think about, but they’re what enable you to collect benefits in retirement. You must earn a total of 40 Social Security work credits in your lifetime to get benefits when you’re older, and the maximum number of credits you can earn in a single year is four.
The value of a work credit can change over time. This year, $1,890 in earnings gets you one work credit. In 2027, the value of a work credit will increase to $1,970. If you’re a very part-time worker and need those credits, you’ll need to track your earnings carefully and potentially pick up some extra hours.
Don’t be in the dark
If you’re still working, you may be many years away from being able to collect Social Security benefits. But that doesn’t mean you shouldn’t keep tabs on what’s happening with the program. Changes like the ones above can directly impact you, so it’s important to pay attention to updates when they’re announced.
The SSA usually makes program change announcements in October. So while you may be caught up for now, be sure to mark your calendar for next year so you don’t end up in the dark.