In this work we study the impact of ion implantation on the nonlinear optical properties in MgO:LiNbO3 via confocal second-harmonic microscopy. In detail, we spatially characterize the nonlinear susceptibility in carbon-ion implanted lithium niobate planar waveguides for different implantation energies and fluences, as well as the effect of annealing. In a further step, a computational simulation is used to calculate the implantation range of carbon-ions and the corresponding defect density distribution. A comparison between the simulation and the experimental data indicates that the depth profile of the second-order effective nonlinear coefficient is directly connected to the defect density that is induced by the ion irradiation. Furthermore it can be demonstrated that the annealing treatment partially recovers the second-order optical susceptibility.