Should I take Social Security 6 months before FRA while on severance pay? Need advice on timing

Your logic is sound but you're missing a key detail - you don't HAVE to start Medicare at exactly 65 if you have qualifying employer coverage through your severance package. Since your employer health insurance is active until September 2025, you qualify for a Special Enrollment Period for Medicare that extends 8 months after your employer coverage ends.Also, have you calculated the lifetime reduction from taking SS 6 months early? If your FRA benefit would be $2,500/month, a $215 reduction means $2,580 less per year for the rest of your life. You'd need to live less than 15 years past FRA for the early filing to mathematically benefit you.

Thank you! I didn't realize I could delay Medicare while on severance coverage - that's really helpful. You're right about doing the lifetime calculation... if I live to 85, that's 20 years x $2,580 = $51,600 less over my lifetime. When you put it that way, waiting those 6 months seems more important. I guess I'm just nervous about drawing down savings during those 6 months.

Actually, you should really run some numbers here. That $215/month reduction might not seem like much, but over 20 years that's $51,600!!! And if you live longer than that (which is likely these days), you lose even more. The SSA designs these reductions to be actuarially neutral, but most financial planners I've talked to say waiting is usually better if you can afford it and are in good health.Also check if there are any tax implications of taking SS while receiving severance. Depending on your total income, up to 85% of your SS benefits could be taxable!

This is a good point about the taxes. When I took SS while still gettin severance, I ended up paying way more in taxes than I expected. Not saying don't do it just be prepared for that hit.

I was in a similar situation last year. Got laid off at 64, had severance until just after I turned 65. I decided to wait until my Full Retirement Age (66+2mo for me) to take Social Security and it was the right call. Here's what I learned trying to reach someone at Social Security to discuss my options - it's nearly impossible to get someone on the phone! After trying for WEEKS with constant busy signals and disconnects, I found a service called Claimyr (claimyr.com) that got me connected to a real SSA agent in under 20 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puUThe agent I spoke with actually convinced me that waiting until FRA made more sense in my case because of how the lifetime benefits calculated out. Best decision I made - that quick call saved me from making a mistake that would have cost thousands over my lifetime.

Thanks for sharing your experience! I've been trying to get through to SSA without luck - their phone system is awful. I'll check out that service you mentioned because I really do need to speak with someone who can look at my specific numbers. Did they explain all the implications or just give basic information?

They went through everything with me - how much I'd lose by filing early, how survivor benefits would be affected if I died first (this matters a lot for your husband since he's already collecting), and even some tax implications. Definitely worth the call to get your specific situation evaluated.

whyd your husband take ss at 62?? thats usually a bad move unless hes ill. my sister took it early and she regrets it ALOT now. just sayin

Not always a bad move! Some people need the money early. Or maybe they have health issues and don't expect to live into their 80s. Or maybe they have other investments that taking SS early lets them preserve longer. Too many people think waiting is ALWAYS better when it's really situational.

My husband had some health concerns at the time so we decided it made sense for him. He's doing better now but we don't regret the decision given the circumstances we had at the time. But you're right that for many people waiting is better financially.

One important thing to consider is the earnings test if you might work at all before reaching your FRA. If you claim SS 6 months before FRA and then decide to work even part-time, SSA will deduct $1 from your benefits for every $2 you earn above the annual limit ($22,320 in 2025). This isn't actually a permanent reduction—they'll recalculate and increase your benefit when you reach FRA to account for the months they withheld benefits. But it might make claiming early less attractive if there's any chance you might work during those 6 months.Also, since your husband claimed early, have you considered how your claiming strategy affects potential survivor benefits? If your benefit would be higher than his (especially at FRA or 70), waiting could provide him a larger survivor benefit if you predecease him.

That's a really good point about survivor benefits! My benefit at FRA would be higher than what he's receiving, so waiting would give him more if I die first. I hadn't considered the survivor benefit angle at all. And thanks for the warning about the earnings test - I don't plan to work during this period, but it's good to know how that would impact things if I change my mind.

You can calculate the breakeven point! Take the amount you'd get by waiting to FRA and subtract what you'd get by filing 6 months early. Then divide the total 6 months of payments you'd get by filing early by that monthly difference. That tells you how many months it would take for waiting to FRA to

That's a really practical way to look at it! So if I'd get $2,500 at FRA vs $2,285 filing 6 months early, I'd get about $13,710 ($2,285 × 6) by filing early. The difference is $215/month, so it would take about 64 months (5.3 years) after FRA to break even. That really puts it in perspective.

Everyone always talks about maximizing SS but nobody talks about ENJOYING the money. My husband and I both took it at 62 and used it to travel while we were still healthy enough to enjoy it. No regrets! The financial calculators don't account for quality of life. Just another perspective to consider...

That's a really valid point! The

That's a wonderful perspective! We do want to travel more while we're still able to enjoy it. I think I need to balance the financial optimization with quality of life considerations. Thank you for that reminder!

I'd suggest creating a simple spreadsheet to model both scenarios over different time horizons. Include your severance timeline, projected unemployment benefits, 401k withdrawal needs, and tax implications for each approach. Don't forget that delaying SS by 6 months also means 6 more months of potential 401k growth if you don't need to withdraw as much. Also consider your risk tolerance - taking SS early provides guaranteed income security during an uncertain job market, while waiting optimizes long-term benefits. Given that you have a solid 401k balance and severance through September, you seem to have flexibility either way. The "right" choice depends on whether you prioritize security now vs. maximizing lifetime benefits. One more thought: have you looked into COBRA vs. Medicare timing? Sometimes COBRA can bridge the gap if you want to delay both SS and Medicare until your true FRA.