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AARP's Social Security Q&A Tool

If I collect Social Security benefits early but earn more than $15,720 limit, how do I pay the penalty?

En español | You should notify the Social Security Administration of any earnings that you make so that it can adjust your benefits more quickly (through the Retirement Earnings Test). If you do not notify SSA, it will be notified through your W-2 form that SSA receives through the IRS. If you earn more than the Retirement Earnings Test threshold ($15,720 in 2015 for earnings prior to age 66), the SSA will reduce your benefit by $1 for every $2 in earnings over $15,720. SSA will automatically reduce your benefits once it learns of your earnings (through you or the IRS). If you do not inform Social Security that you exceeded the Retirement Earnings Test threshold and received a higher monthly benefit, your check will be reduced in the future once Social Security is aware of the overpayment. There is no "penalty" and the money that is taken from your benefit before full retirement age will eventually be returned to you in the form of slightly higher payments after you reach full retirement age.

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