'They say I made $43,000 in 2019, but I actually made that in 2020'

"Can [the Social Security Administration] reduce my benefits based on earnings after I had already reached full retirement age and had been collecting benefits for seven years?"

Dear Help Me Retire,

I just received a letter from the Social Security Administration stating that I was overpaid based on my earned income in 2019. It is now 2026. The SSA claims I earned $43,000 in 2019, but I actually earned that amount in 2020. My income from work in 2019 was $32,000.

I was 72 years old in 2019 and had been receiving Social Security benefits since age 65. Can the SSA reduce my benefits based on earnings after I had already reached full retirement age and had been collecting benefits for seven years?

Confused Retiree

Don't miss: My husband died when I was 38, leaving me with four kids who each received Social Security. I'm now 60. When do I claim?

Dear Retiree,

Receiving a letter from the government stating that you owe money it paid you nearly a decade ago must be stressful. There are steps you can take to try to resolve this with the Social Security Administration.

The situation sounds unusual, so you should follow up with the SSA and request a detailed explanation - or perhaps even a correction if an error was made. Ask for a clear accounting of how it determined your earnings for that year and exactly why it believes you were overpaid.

You should also ask why this issue is arising now, given that you had already been well past full retirement age and had been receiving benefits for years by that point. Overpayment notices can sometimes result from inaccurate or incomplete information.

Overpayment notices are often the result of inaccurate information, the Social Security Administration says on its website.

"Overpayments occur because of missing or incorrect information," the agency says. "This can happen if you do not tell us about changes in your life, such as your ability to work, where you live, your marital status or your income. If you receive an overpayment notice from us, it will explain the specific reason the overpayment occurred."

Do you have questions about retirement, Social Security, where to live or how to afford it at all? We want to hear from you. Join the conversation in our Facebook community: Retire Better with MarketWatch.

Let's first break down the rules, so you know what to discuss with the SSA when you have that conversation. As you may know, retirement benefits can begin as early as age 62, but an individual does not receive 100% of his or her benefits until reaching full retirement age $(FRA)$, which is 67 for anyone born in 1960 or later. Those who delay claiming benefits beyond FRA, up to age 70, earn delayed retirement credits that increase their benefit by roughly 8% for each additional year they wait.

If you were born in 1947 - or anytime between 1943 and 1954 - your FRA is 66 years old. That means you began collecting benefits about one year before reaching FRA. According to the Social Security Administration, if you claimed benefits at age 65, you would receive about 93.3% of the benefits available at FRA.

That reduction is permanent. However, the SSA has separate rules governing earnings while receiving benefits. Beneficiaries who collect Social Security before reaching FRA and continue working are subject to earnings limits. The agency withholds $1 in benefits for every $2 earned above the limit before FRA, and $1 for every $3 earned above the limit during the months leading up to FRA in the year you reach it. For example, if your birthday is in July, the rule would apply only from January through June of that year. Once you reach FRA, the SSA recalculates your benefit to account for any benefits that were withheld.

This is where you need to do some digging. Review your Social Security payment statements and determine whether the agency withheld benefits because you were earning income while collecting Social Security. If it did not withhold the appropriate amount, that may explain why the SSA is now claiming it overpaid you. While reviewing your records, gather documentation of your earnings for those years, especially if you believe the agency has the wrong income information on file.

Related: My husband died when I was 38, leaving me with four kids who each received Social Security. I'm now 60. When do I claim?

Next steps

Normally, when you get an overpayment notice in the mail, you need to pay the agency back within 30 days. But if you still feel you do not owe the Social Security Administration any money, you can file an appeal online or by mail within that time period instead. You must act: The SSA will automatically withhold 50% of your benefit each month after that 30-day window until the amount it says you owe has been repaid. If you file an appeal within that time frame, it will not begin collecting funds until a decision has been reached.

And you've only got 60 days from when you receive the notice to file a "request for reconsideration." Otherwise, you generally miss the window to appeal altogether. "You must have a good reason for waiting more than 60 days to ask for an appeal," the SSA says.

To file an appeal, you'll need the overpayment notice you received and the documentation proving your case. Check with the agency if it will need any original or certified copies of anything.

You could also request a waiver depending on your financial situation. "If you got a letter in the mail that says you were overpaid, you generally need to pay us back," the SSA says on its site. "If you can't afford the repayment and feel the error wasn't your fault or is unfair, you can request a waiver to avoid having to repay an overpayment."

Whatever you decide to do, make sure you have the right information to back up your request - and act quickly. You don't want the agency to take the money out of your benefit without your say.

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Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com.

-Alessandra Malito

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June 27, 2026 15:30 ET (19:30 GMT)

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