Guaranteed Retirement Income: Bridging the Social Security Gap

What is a Bridge Strategy?

A bridge strategy is a plan designed to cover living expenses if you retire before age 70 and want to delay claiming Social Security benefits until age 70. By waiting, you lock in the maximum possible monthly benefit—but that means you’ll need another source of income in the meantime.

Who Can Benefit from a Bridge Strategy?

Anyone who retires before age 70 and has resources to fund expenses until Social Security begins may benefit. This approach is especially helpful for those who want to maximize guaranteed lifetime income.

How Does a Bridge Strategy Work?

A retirement income bridge can be created from:

1. A short-term bond or CD ladder
2. An annuity providing guaranteed[i] income
3. Systematic withdrawals from an investment portfolio
4. Reverse mortgage payments
5. Cash value from a whole life or universal life insurance policy

Another option is part-time or consulting work during the gap years. Each approach has advantages and trade-offs, so it’s important to evaluate carefully with your financial professional.

Why Use an Annuity for a Bridge Strategy?

For investors who value certainty, an income annuity can provide predictable, guaranteed payments—helping ensure essential expenses are covered while waiting to claim Social Security.

What is a Social Security Default Hedge?

A hedge is simply protection against risk—similar to insurance. The concern here is the projected funding shortfall of the Social Security Old-Age and Survivors Insurance (OASI) trust fund. Current projections show that if no changes are made, the trust fund may be depleted by 2033. In that case, benefits could be reduced to about 77% of the scheduled amount.[ii]

To protect against this, retirees can create an alternative income stream to cover the potential 23% shortfall—a “Social Security default hedge.”

Key Questions to Consider When Designing Your Retirement Plan:

1. What are your expected expenses in retirement? This helps determine your total income needs.
2. Which expenses are essential (housing, food, healthcare)? These are best matched with guaranteed income sources so you know they’re covered.
3. How would your expenses look if Social Security only covered 77% of the benefits you expect? This helps you calculate how much additional income you may need to hedge against the risk.

As an independent fiduciary financial advisor, my role is to help you evaluate options in the marketplace and select the strategy that best aligns with your goals. Whether it’s building a bridge to maximize Social Security benefits or creating a hedge against potential reductions, planning ahead can give you greater confidence and peace of mind in retirement.

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[i] Guarantees are backed by the claims -paying ability of the issuing insurance company.

[ii] Social Security Trustees Report, “A summary of the 202 Annual Reports: Social Security and Medicare Boards of Trustees,” accessed June 17, 2025.