Eligibility for Social Security retirement benefits begins at age 62. But waiting until age 70 can unlock the program’s full potential, boosting monthly payouts by as much as 77%. That financial incentive, however, leaves a critical planning question: how do you fund the years between early eligibility and maximum benefit?
This is where a “bridge strategy” comes in—an increasingly discussed concept in retirement planning circles and now the subject of renewed attention in a Bipartisan Policy Center report. The core idea is simple: rather than claim early and lock in a lower benefit for life, retirees can use other income sources to “bridge” the gap until age 70. Yet while the math may favor this approach, real-life constraints often get in the way.
This article explains how delaying Social Security works, what a bridge strategy entails, who stands to gain, and how different funding methods compare. For many, it’s not just about maximizing retirement income—it’s about managing longevity risk and preserving long-term financial flexibility.
Under current Social Security rules, eligible Americans can begin receiving retirement benefits as early as age 62. However, claiming before full retirement age (FRA)—which is 66 or 67 depending on birth year—results in a permanently reduced benefit. For example, a worker entitled to $2,000 per month at FRA would receive only $1,400 if they claim at 62—a 30% reduction.
On the other hand, delaying benefits past FRA adds delayed retirement credits: 8% per year until age 70. That same worker could receive $2,480 per month by waiting until 70—a 77% increase over the early claim. Since Social Security payments are inflation-adjusted and guaranteed for life, the difference adds up substantially, especially for those who live well into their 80s or 90s.
According to the National Bureau of Economic Research, more than 90% of retirees would financially benefit from delaying Social Security—but only about 10% actually do. The most common reason for early claims is simple: cash flow needs. Without income from work or other assets, many Americans feel they have no choice but to claim early.
That’s the gap a bridge strategy seeks to address.
A bridge strategy refers to any financial method used to fund living expenses between retirement and the delayed start of Social Security benefits. It is not a formal government program, but rather a planning technique that allows retirees to delay claiming their benefits until age 70 without compromising their standard of living.
The strategy may involve one or more of the following income sources:
- Continued employment
- Systematic withdrawals from retirement accounts
- Use of cash savings
- Purchase of annuities that generate near-term income
The goal is to replace income during the 62–70 window while preserving the long-term benefit increase that comes from delaying Social Security. Done well, this approach can result in higher lifetime income, better protection against inflation, and lower exposure to longevity risk. But it’s not without tradeoffs—including liquidity risk, market volatility, and reduced inheritance potential.
Consider this illustrative example based on figures from the Bipartisan Policy Center:
- A 62-year-old worker entitled to $2,000 per month at full retirement age (67) has two options:
- Claim at 62: Receive $1,400 per month permanently.
- Delay to 70: Receive $2,480 per month permanently.
If the retiree lives until age 88, the cumulative total benefit under each strategy looks like this:
- Claim at 62: $436,800 (from age 62 to 88)
- Claim at 70: $535,680 (from age 70 to 88)
In this case, delaying generates nearly $100,000 more in lifetime benefits—despite collecting checks for 8 fewer years. That difference only grows if the retiree lives longer or if inflation causes Social Security’s cost-of-living adjustments to rise.
But bridging those 8 years requires careful financial engineering.
Option 1: Work Longer
The most straightforward bridge strategy is to continue working. This approach avoids tapping retirement savings prematurely and may even allow for additional contributions to retirement accounts.
Staying in the workforce also has non-financial benefits: maintaining social connections, staying mentally active, and delaying costly healthcare needs. For those in good health and with flexible work arrangements, it’s the most sustainable and least disruptive method.
However, not everyone can—or wants to—work until 70. Physical health, caregiving responsibilities, or labor market constraints often make this strategy unrealistic.
Option 2: Use Retirement Savings
Many retirees consider drawing from their 401(k), IRA, or other taxable investment accounts to fund the bridge years. On paper, this makes sense: use your own money now in exchange for higher guaranteed income later.
But this method carries risks. One major concern is “sequence of returns” risk. If a retiree begins drawing from their portfolio during a market downturn, it can permanently damage the account’s growth potential—even if the market later recovers. A depleted portfolio may also reduce flexibility in later years and limit bequests to heirs.
Tax considerations further complicate this strategy. Withdrawals from traditional retirement accounts are treated as ordinary income, potentially pushing the retiree into a higher tax bracket during the bridge years.
For this reason, many planners recommend coordinating withdrawals across different account types—such as blending Roth and traditional IRA distributions—to manage both income needs and tax exposure.
Option 3: Buy an Annuity
Annuities can also serve as bridge tools, especially for retirees who prioritize income certainty. Two main types are relevant here:
Immediate Annuities: These begin payments shortly after purchase and offer predictable income for a fixed term or life. For example, a 62-year-old might purchase an 8-year period-certain immediate annuity to generate monthly income until age 70, at which point Social Security benefits begin. The downside is illiquidity—once the lump sum is committed, it’s generally locked in. In a low-interest-rate environment, the income generated may also be modest compared to other options.
Deferred Income Annuities: These allow retirees to make a lump-sum payment upfront, with income beginning at a future date (e.g., age 70). This can serve as a future income supplement that complements delayed Social Security. However, deferred annuities involve some forecasting risk. If the retiree’s situation changes—such as unexpected health expenses or early death—the product may provide less value than expected.
Option 4: Spend Cash or Downsizing Assets
Some retirees may choose to use liquid savings, such as high-yield savings accounts or matured CDs, to fund early retirement years. Others may consider downsizing their homes or selling assets to generate the needed income.
This approach provides maximum flexibility and avoids market risk. However, few retirees have enough liquid assets to cover up to 8 years of living expenses without eroding their long-term financial security. Additionally, selling assets like real estate can have emotional and logistical implications, especially if the home is family-owned or in a competitive housing market.
Bridge strategies are not for everyone. But they may be especially suitable for:
- Healthy retirees with long life expectancy: The longer you live, the more delaying benefits pays off.
- Single individuals or those without spousal benefits: These retirees depend solely on their own benefit and stand to gain more from maximizing it.
- Professionals with part-time or consulting income: Those with flexible work arrangements can often blend employment with partial drawdowns.
- Individuals with adequate retirement savings: The strategy works best when supported by diverse income sources and tax-efficient accounts.
By contrast, retirees with chronic health issues, limited savings, or short planning horizons may be better served by claiming early and preserving liquidity.
It’s worth noting that financial decisions around Social Security are rarely just about math. Many retirees grapple with fears about the program’s long-term viability, their personal health, and market volatility. These emotional factors often lead people to claim early—even when delay would be more beneficial.
Fear of dying early is a particularly powerful motivator. But statistically, most retirees will live into their 80s. For those who do, the higher delayed benefit offers far more value than the smaller early payments. This is where planning and confidence come in. Working with a financial advisor who can model different scenarios may help individuals make decisions rooted in probability—not anxiety.
The renewed interest in bridge strategies reflects broader conversations about retirement readiness in the US. With pension plans disappearing and the shift to defined-contribution systems, Social Security remains the most stable and inflation-protected income stream for most Americans.
Encouraging delayed claiming—through planning tools, employer education, or annuity-linked products—could help improve retirement outcomes across income levels. Some policy experts have proposed formal “Social Security bridge accounts” that function like workplace savings plans but are designed specifically to delay benefit claims.
At present, however, the responsibility rests with individuals and financial advisors. As more Americans approach retirement, bridge strategy planning may become a more mainstream feature of retirement education and wealth management.
Delaying Social Security until age 70 can significantly boost lifetime income, improve inflation protection, and reduce the risk of running out of money late in life. But to access that benefit, you must first survive the income gap between eligibility and claim age. That’s where a bridge strategy matters. Whether through continued work, strategic withdrawals, or annuities, a well-structured plan can unlock one of retirement’s most valuable income levers.
Still, this isn’t about one-size-fits-all advice. It’s about understanding the tradeoffs—and choosing a path aligned with your health, goals, and available assets. Start early, seek clarity, and think beyond the first payout. Because when it comes to retirement income, timing isn’t just a number. It’s a strategy.
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