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If you earn too much money while receiving Social Security before reaching your full retirement age, Medicare will adjust your Social Security benefits based on your earnings. If you've made over the earnings limit, you do not need to call anyone; just pay your taxes, which will reflect your income. The adjustment will occur next year, and although you won't receive that overpaid amount back in a lump sum, once you reach full retirement age, your benefits will be recalculated. If, for example, they deducted $8,000 from your Social Security due to excess earnings, you will eventually receive a slightly higher monthly benefit to compensate for it, provided you live long enough. Thus, it is not a permanent penalty.