How Much You’d Need to Set Aside to Receive $5,000 a Month Between Ages 62 and 70 as Social Security Delays Build

Quick Read

• Retiring at 62 and holding off on Social Security until 70 calls for roughly $448,000 in a bridge fund to supply $5,000 a month for eight years.

• A 50/50 mix of SGOV and VTIP combines about a 4% yield with inflation protection, creating an average return near 5% and drawing the bridge down to zero by age 70.

• Delaying until 70 lifts the average Social Security benefit from $1,450 to $2,568 a month, and the breakeven point versus claiming at 62 comes around age 80.

Many retirees like the idea of leaving work at 62, waiting until 70 to file for Social Security, and still drawing income in the years between. In practice, that requires planning. In this example, the target is $5,000 a month, or $480,000 over eight years before inflation.

The money used to cover that gap is often called a bridge fund. It pays expenses from the day you retire until the point when waiting longer no longer increases your Social Security check. Here, the bridge is built from two Treasury-based funds split evenly, and the cost is laid out below.

What an Eight-Year Bridge Costs

The assumptions here rely on Treasury data from late October 2026. Half the portfolio earns about 4%, roughly matching the 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% a year.

That is slightly below the 3.6% increase seen 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 average return comes to about 4.5%.

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With those figures, about $448,000 is enough to cover the full eight years and run down to roughly zero by 70. That means about $224,000 in each fund. By contrast, living only off interest would require about $1.3 million to generate $60,000 a year. That would tie up far more principal than is needed for an eight-year bridge. Social Security takes over at 70, so the bridge can be spent down.

Cash-Like Monthly Income From Short-Term Treasury Bills

That fund’s yield moves with short-term rates. Its monthly payout slipped from about $0.36 per share in mid-2025 to about $0.30 by late 2026 as rates declined. Investors should also check the current expense ratio in the prospectus, since fees come directly out 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. A recent look at Treasuries as a state tax shelter explains what that can mean in high-tax states.

Inflation Protection That Helps Prevent the Bridge From Shrinking

The tradeoff is uneven payouts, because the inflation adjustment shows up in the distribution amount. The fund paid $0.0227 per share in April 2026 and $0.9333 in October. One practical method is to use the Treasury bill fund for monthly bills, sell some TIPS shares now, and then replenish them later.

What Waiting Until 70 Adds Up To

If you were born in 1960 or later, full retirement age is 67. Claiming at 62 reduces the benefit by 30%. Each year you delay beyond full retirement age adds 8%, and those increases stop at 70.

Assume your benefit at full retirement age is $2,071, 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 breakeven point is when the higher monthly benefit makes up for the eight years you skipped. In this example, that happens around age 80. Each payment also receives cost-of-living increases, including the 3.6% rise expected in 2027.

Tax Benefits and Health-Care Costs in the Gap Years

Using a Treasury bridge can keep taxable income low in your 60s. That can create room for Roth conversions, as discussed in coverage of low-income conversion years. Medicare surcharges are still worth watching. Once income rises above $109,000 for a single filer, Part B premiums increase.

Health insurance from 62 to 65 generally comes through the ACA marketplace, where lower reported income can reduce premiums. 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.

Your Bridge Target and the One Assumption to Revisit Each Year

The larger Social Security benefit that the bridge helps buy lasts for life and continues to receive inflation adjustments. Each January, compare actual inflation with the 3% assumption. If prices keep climbing faster than expected, the bridge could run out before 70 unless you add more money or trim spending.

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