How Much You’d Need to Invest to Pull $5,000 a Month From 62 to 70 While Social Security Keeps Rising

Retiring at 62 and delaying Social Security until 70 may look sensible on paper, but few people calculate what it actually takes to replace eight years of income in the meantime. The answer here comes down to two Treasury funds and a single dollar figure.

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A lot of people like the idea of leaving work at 62, waiting until 70 to file for Social Security, and still drawing income along the way. Few have broken down the cost. In this example, that income target is $5,000 a month, or $480,000 over eight years before inflation.

The money set aside to fill that gap is known as a bridge fund. It covers expenses from the day you stop working until you start Social Security at the age when delaying no longer boosts your benefit. Below, we build that bridge using two Treasury funds split evenly and show the amount needed.

What an Eight-Year Bridge Costs Now

The assumptions here are based on Treasury data from late October 2026. Half the portfolio earns roughly 4%, matching the 4% yield on 13-week Treasury bills. The other half earns the 2% real yield on five-year TIPS plus inflation. Inflation is assumed to run at 3% annually.

That is slightly below the 3.6% increase over the past year in the government’s research inflation index for Americans 62 and older. The first withdrawal is $5,000, and each later withdrawal rises with inflation. Under those assumptions, the blended return works out to about 4.5%.

Using those figures, about $448,000 is enough to cover the full eight years and decline to roughly zero by age 70. That means about $224,000 in each fund. By comparison, relying on interest alone to generate $60,000 a year would require about $1.3 million. That would tie up more principal than the bridge needs, especially since Social Security eventually takes over and allows the bridge to be spent down.

Monthly Income With a Cash-Like Treasury Bill Fund

iShares 0-3 Month Treasury Bond ETF (NYSEARCA:SGOV) owns Treasury bills that mature in less than three months. The fund manages about $106 billion. Because the underlying bills mature so quickly, the share price moves very little, making this half of the bridge behave much like cash while paying income monthly.

Its yield changes with short-term rates. The monthly distribution fell from about $0.36 per share in mid-2025 to about $0.30 by October 2026 as rates eased. It is worth checking the latest expense ratio in the prospectus, since fees reduce the size of the bridge.

Treasury interest is “subject to federal income tax but is exempt from all state and local income taxes,” according to IRS Publication 550. Our recent article on Treasuries as a state tax shelter explains how valuable that can be in high-tax states.

Why Inflation Protection Matters

Vanguard Short-Term Inflation-Protected Securities ETF (NASDAQ:VTIP) holds short-term TIPS. With a TIPS bond, the principal increases with consumer prices, and investors earn a fixed real yield on top of that rising principal. When inflation picks up, this part of the bridge helps preserve spending power.

The drawback is that payouts can be uneven because the inflation adjustment flows through the distributions. The fund paid $0.0227 per share in April 2026 and $0.9333 in October. A practical method is to cover monthly bills from the Treasury bill fund, sell some TIPS shares when needed, and then replenish the position.

How Much Waiting Until 70 Can Add

For anyone born in 1960 or later, full retirement age is 67. Claiming at 62 reduces the benefit by 30%. Each year you wait beyond full retirement age adds 8%, with those delayed retirement credits stopping at 70.

If your full retirement age benefit is $2,071, which is close to the current average for retired workers, that would translate to about $1,450 a month at 62, $2,071 at 67, and roughly $2,568 at 70. The break-even point is when the larger benefit finally makes up for the eight years of payments you skipped. That point arrives around age 80. Benefits also receive cost-of-living increases, including the 3.6% rise expected in 2027.

Taxes and Health-Care Costs in the Gap Years

Using a Treasury-funded bridge can keep taxable income low in your 60s. That can create room for Roth conversions, which we have covered in our discussion of low-income conversion years. One thing to watch is the Medicare income-related surcharge: once a single filer’s income exceeds $109,000, Part B premiums increase.

Health insurance from age 62 to 65 typically comes through the ACA marketplace, and lower reported income can reduce those costs. At 65, Part B costs $202.90 a month. That amount should be added on top of the $5,000 target unless it is already included in the budget.

Putting a Price on the Bridge

The higher Social Security benefit you secure by waiting lasts for life and continues to rise with inflation. Each January, it makes sense to compare actual inflation with the 3% assumption. If expenses rise faster than expected, the bridge could run out before age 70 unless you add more money or trim spending.