By JEFF WATERS / Guest Columnist

Do you know when to begin taking social security payments? The following tips may help you when the time comes to make this decision.

-Know your normal retirement age: The age at which you can begin full Social Security payments will increase gradually until reaching age 67 in 2027.  Potential new legislation may extend Social Security’s retirement age even later.

Take payments before normal retirement age and your benefits may be permanently reduced. Delay payments as late as age 70 and you can add to what your normal retirement age benefit would have been had you retired earlier.

-Know the consequences of taking early payments: The younger you begin taking payments before normal retirement age, the more your benefits will be permanently reduced.

If you were born in 1960, for instance, and begin taking payments at age 62 — the earliest you can take them — your benefits will be reduced by 30 percent.

-Know how working affects your benefits: Working while taking benefits before normal retirement age can temporarily reduce your payments even further.  For example, Social Security payments you receive when work earnings exceed a relatively small annual limit are reduced $1 for every $2 you earn if you are below normal retirement age.

A special rule applies for benefits taken during the year in which you attain normal retirement age.

Starting the month you reach full retirement age, you can receive benefits with no limit on earnings.

Talk to your financial professional to learn how Social Security payments fit with your other expected sources of retirement income.

Jeff S. Waters is a financial adviser at Waters Wealth Strategies.  He can be reached at 358-7126 or by email at jswaters@waterswealthstrategies.com.