I owe money to Social Security. What’s next?

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Q. I will be 66 years old in on Oct. 31, 2020. I have been on SSDI for three years and working part-time. I thought I was keeping my income under $1,180 per month for there were several times where we had three pay periods each month instead of only two. Even though I was only over earnings by $3.64 and $8.32, they don’t prorate the amount so I have to pay back the full SSDI benefits. I’m looking at paying back $15,000 by having them keep $100 a month from my SSDI. Based on this, would it be better to go straight to a retirement benefit or should I wait until my 66th birthday?

— Still working

A. It looks like you came to an agreement to repay the SSDI overage.

The appeals process can help make sure that Social Security doesn’t put you in a financial bind as you pay back what is owed, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge.

She said another form of appeal is a “reconsideration,” which can be used if you feel the amount Social Security calculated as overage is wrong, Mott said.

You may have already pursued this en route to the repayment plan.

Mott said given that you have been on SSDIfor three years, it’s important to be aware of the earnings limit for 2020.It’s now $1,260 per month, she said.

“Waiting until full retirement age (FRA) to file for your regular Social Security has two benefits, Mott said. “The first is no reduction in your monthly SSA payment and the second is a substantially higher limit on what you can earn.”

If you file 10 months prior to FRA, the payment you receive will be 94.4% of the full benefit for your lifetime and any survivor benefits would also be based off this lower amount, she said.

“The reduction percentage declines for each month you draw nearer to 66,” she said. “Each month you wait adds between 0.5 and 0.6 percentage points to the percentage.”

For those who file for Social Security prior to FRA, the annual earnings limitfor 2020 is $18,420, Mott said. Benefits are reduced $1 for every $2 earned over and above that limit.

“However, in the year you reach FRA, the amount you could earn jumps to $48,600 and the benefit reduction is $1 for every $3 earned above the threshold prior to reaching age 66,” she said.

Mott said once you attain full retirement age, there is no reduction in your Social Security benefit, but be aware that you may be subject to income taxeson up to 85% of what you receive.

“As a single filer, combined income — earnings, retirement payments, half your Social Security and tax-exempt interest — which exceeds $25,000 will be subject to some amount of tax,” she said. “For joint filers, the income limit is $32,000.”

You can also expect the agency to continue taking the $100 per month you agreed to repay.

Email your questions to Ask@NJMoneyHelp.com.

Karin Price Mueller writes the Bamboozledcolumn for NJ Advance Media and is the founder of NJMoneyHelp.com.Follow NJMoneyHelp on Twitter @NJMoneyHelp.Find NJMoneyHelp on Facebook.Sign up for NJMoneyHelp.com’s weekly e-newsletter.