Don’t Worry if You Exceed the Social Security Earnings Limit

Working and Collecting SS Benefits - Rebel Retirement

Have you exceeded the yearly Social Security earnings limit? Or think you might?

Don’t worry.

I know from personal experience that returning the money to Social Security is painless and efficient.  And I’m going to explain exactly how it works.

But first,  I’ll give you some background information.

Rebel Retiree began collecting benefits at 62.  Then in the second quarter of 2018, he started working part-time. He anticipated he might go over the annual earnings limit by the end of that year.

What he didn’t know, however, was how long the job would last, or if he would quit before ever reaching the earnings limit.

With that in mind, instead of notifying  Social Security in advance, he decided to play it by ear, go with the flow, and let everything fall into place on its own.

By the end of the year, there was no doubt his earnings exceeded the annual allowable limit. The following January, his W2s confirmed it.

At that time, we weren’t exactly sure how it would be resolved.

I know there can be a certain amount of apprehension when faced with something unfamiliar, especially when dealing with bureaucratic agencies like the Social Security Administration.

And although Social Security’s website is readily available for us to pull up on our devices and very thorough in its explanations, there are many rules and regulations to digest.

And sometimes it can be overwhelming, if not confusing.

Because we’ve had experience with this situation, I decided to write this article. I hope you find it useful.

SS 2020 Earnings Limit Graphic - Rebel Retirement


Help! I’ve exceeded the Social Security earnings limit.

If you’re afraid the Social Security Administration will punish you for exceeding the earnings limit, you are not alone.

There are countless other baby boomers in this situation.

In light of that, you may find this story interesting. A question popped up on a Facebook group that I follow. The group is for retirees or those wanting to retire.

A group member had taken early Social Security benefits before full retirement age.  She was working and had exceeded the yearly earnings limit. She wanted to know what happens if you work and make more than the allowable limit.

After contacting her local Social Security office, she found herself more confused than ever before and decided to reach out to the group.

The woman wanted to know if anyone in the group had personal experience with this type of situation.

She worried about:

  • Penalties
  • How to return the money
  • Do you pay them back directly
  • Do you need to write a check to the Social Security Administration
  • When will benefits resume after SSA withholds the over payments

A few people replied.

  • Someone recommended that she rethink her situation and suspend her benefits until her full retirement age
  • Another quoted the Social Security Administration
  • People shared links to confusing articles

People tried to be helpful, while others treated her like she had made a mistake.

I could tell from reading her replies, that their answers were unsatisfactory.

I knew that I could help and explained my experience to her.

From the reply she left me, I’m confident that she received the information that she needed.

Now, to detail what happens if you work, collect social security benefits, and earn over the annual earnings limit.

It’s not as complicated as you may think.

What to do if you earn more than the Social Security earnings limit?

Let me say that the Social Security Administration will only contact you by official mail through the United States Postal Service. Unless you initiate phone communication, they will never call you. Having said that,  please understand that all of the examples I share come from communications by mail.

You don’t have to do anything in advance if you work while collecting benefits and expect to exceed the annual earnings limit.

Yes, the Social Security Administration wants you to advise them in advance. However, that isn’t always practical for various reasons. You will not be penalized or pay extra for waiting until you are certain how your particular circumstances develop.

When Social Security receives your W2s and tax returns, they will evaluate your account and make adjustments accordingly.

RR Exceeding Earnings Limit Timeline-Rebel Retirement

Personal experience exceeding the annual Social Security earnings limit.

Approximately 6 months after filing our joint tax return for 2018 which claimed earnings from Rebel Retiree’s part-time job, he received a letter from the Social Security Administration.

The letter explained that work and earnings caused a change in his benefit amount. It thoroughly explained the amount of overpayment. And it showed the amount that must be repaid to Social Security.

It stated that X amount of dollars from the September 2019 payment would be withheld in October to recover the overpayment.

As in all tax-related judgments, the letter informed Rebel Retiree of his right to appeal. It also stated his right to request a waiver if:

  • The overpayment was not his fault in any way
  • He could not meet living expenses if they recovered the overpayment
  • If recovery would be unfair for some other reason

All of the figures were accurate and he had no reason to appeal.

We did not pay out of pocket in advance but simply waited for benefits to be withheld.

The overpayment in benefits was satisfied, and regular Social Security benefits returned the following month.

Information blacked out for privacy.


The Social Security Administration is efficient.

Don’t let the fear of making more than the annual earnings limit stop you from working and claiming your Social Security benefits at the same time.

There are perks to doing so.

As long as you continue to work and collect benefits, the Social Security Administration will check your records annually to see whether your additional earnings will increase your benefit amount.

Yes, that’s right. As long as you put in, your benefits could increase.

However, Social Security has the formula to determine this. And it all depends on your highest-earning years. So, it doesn’t necessarily mean that your benefit amount will increase, but it’s possible. It’s all based on your lifetime contributions. And you best know your circumstances regarding that.

If there is an increase, they will mail you a letter telling you of the new benefit amount.

Additionally, when you reach your full retirement age, they will recalculate your benefit amount and give you credit for any months you didn’t receive a payment because of earnings!

Take Away

Exceeding the Social Security yearly earnings limit while working can be worrisome – especially if you aren’t familiar with the process. However, the SSA is very efficient in how it handles any overpayment of claims.

  • You are not charged a penalty
  • You do not have to write any checks to Social Security to pay them back unless you want to
  • Benefits resume the month after they withhold benefits due to overpayment
  • After you reach full retirement age, they recalculate your benefit amount to give you credit for any months in which you did not receive a benefit because of your earnings.

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Do you have experience with this situation? Please feel free to comment below! And before you go, please take a moment to subscribe to our newsletter, and like us on Facebook!

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