Best Annuities for a Social Security Bridge (2026)

Using an annuity to close the gap before Social Security

Waiting matters. Between your Full Retirement Age and 70, Social Security adds roughly 8% to your benefit for every year you hold off, through what the agency calls delayed retirement credits. Stack those years together and the difference between claiming at 62 and claiming at 70 is large: a benefit of $1,800 a month at 62 turns into something like $3,186 a month for life if you wait until 70. That is not a projection tied to markets; it is written into the Social Security rules.

The catch is obvious once you retire. If you stop earning a paycheck at 62 but do not want to touch Social Security until 70, you have to fund seven or eight years of living expenses from somewhere else. A bridge annuity is that somewhere else. You put money in today, it pays you a steady income for a defined stretch, and while you are cashing those checks your Social Security benefit keeps compounding in the background, untouched.

Want a starting number for your own timeline? Our immediate annuity calculator will estimate what a period-certain income stream could cost, and a licensed strategist can turn that estimate into an actual quote once you are ready to compare carriers.

None of this requires you to touch your investment portfolio during the bridge years, which is part of the appeal. Pulling extra money from stocks or bonds right after you retire, when a downturn could hit at the worst possible time, is the kind of sequence-of-returns risk a bridge is designed to avoid. Instead, a dedicated income contract absorbs the spending need while the rest of your savings stays invested for the long run.

What counts as a Social Security bridge strategy?

A bridge strategy simply swaps one guaranteed income source for another, on a timer. Instead of Social Security, you draw income from an annuity you already own; once your Social Security check starts, the annuity income can taper off or stop, depending on how you structured it.

The strategy holds up financially because the growth Social Security gives you for waiting almost always beats what it costs to fund the bridge. That growth is not open-ended, though. Delayed retirement credits only build between your Full Retirement Age and 70, so your own FRA sets the ceiling on how much delaying is worth to you. If you are not sure what yours is, our full retirement age chart sorts it by birth year, and comparing your options at each claiming age is easier with our Social Security claiming calculator.

Which annuities actually work as a bridge?

Three annuity types show up in bridge planning, and each does a different job.

Period-certain SPIA: built for exactly this

A single premium immediate annuity written on a period-certain basis pays a fixed monthly amount for a set number of years and then stops for good. That shape lines up almost perfectly with a bridge: guaranteed income starting the day you fund it, running out right around the time your delayed Social Security benefit begins.

Carriers price these off a payout factor per $1,000 of premium, which makes a rough estimate easy to get, though the number you can actually lock in only comes from a live quote. If you would rather see a lifetime payout instead of a fixed period, our SPIA guide walks through both versions. Because the payments run for a set number of years rather than for your life, age and gender do not change the payout the way they would with a lifetime annuity.

What makes a period-certain SPIA a strong bridge tool:

• It pays a level, guaranteed income for the exact number of years you are delaying, whether that is 5, 7 or 8
• It is designed to reach zero right on schedule, so it replaces a full paycheck using the least amount of capital
• The payment amount is locked by contract; there is no free-withdrawal cap or surrender charge to track
• If you pass away during the payout period, whatever is left goes to your named beneficiary

MYGA: the flexible option, especially in a ladder

A multi-year guaranteed annuity locks in one fixed interest rate for a chosen term, commonly anywhere from 3 to 10 years. Think of it less as an income engine and more as a growth account with guardrails. Our MYGA guide covers how the contracts work in more detail.

Most MYGAs cap penalty-free withdrawals at around 10% of account value per year, and that cap usually includes any interest you pull out, not just extra on top of it. Someone who puts $200,000 into a 7-year MYGA, for example, would typically be able to access only about $20,000 in year one without a surrender charge, not $20,000 plus whatever interest accrued. Pull more than that and you run into surrender penalties, which is why one MYGA rarely covers a full Social Security-sized paycheck on its own. See our guide to surrender charges for how those penalties are usually structured.

To see the cap in action, imagine a 62-year-old who puts $200,000 into a single 7-year MYGA paying 5.5%. Their penalty-free access in year one is roughly $20,000, the 10% figure, not $20,000 plus the interest the account also earned that year. Try to pull more than that in a single year and the carrier applies a surrender charge to the excess, which is why one MYGA rarely stands in for a full Social Security-sized paycheck by itself.

The better way to use MYGAs for a bridge is to ladder them: split your money across several terms that mature in successive years, so each one hands you a lump of principal and interest, penalty-free, in the exact year you planned to spend it. Our annuity ladder calculator can help you map out the rungs.

Where MYGAs earn their place in a bridge plan:

• Guaranteed, predictable growth with no market exposure during the years you are bridging
• Interest grows tax-deferred, so you decide when to take income and when the tax bill hits
• A ladder releases principal penalty-free right when each rung matures
• Some MYGAs pay their interest out every year instead of compounding it, which can double as a partial income stream

DIA: best when you already know your exact timeline

A deferred income annuity is funded now but does not start paying until a future date you pick when you buy it. For a bridge, a DIA purchased at 62 with income beginning at 65 or 67 can cost less upfront than a MYGA covering the same stretch. The tradeoff is rigidity: once you set the start date and payment amount, they are locked in.

One layered approach: buy a DIA at 62 that starts paying at 65, cover ages 62 to 65 out of other savings, let the DIA carry 65 through 70, and let Social Security take over everything after that. It takes more coordination to set up, but it can lower the total amount of capital you need to commit, since a DIA's income does not need to start on day one and the insurer prices it accordingly. Our SPIA, DIA and MYGA comparison breaks down how the three fit together in a broader income plan, and it is worth pricing a DIA alongside a straight SPIA before you decide which structure gets you to 70 for less money.

Comparing the three bridge tools side by side

Sizing your bridge: a worked example

Start with the gap between what you need to live on and what other guaranteed income already covers, then multiply that shortfall by the number of months you are bridging.

Here is a hypothetical to show the math. Denise is 63, plans to stop working now, and intends to hold off on Social Security until 70. She needs $4,200 a month to cover her expenses and already receives $1,100 a month from a small pension, leaving a monthly shortfall of $3,100. Bridging for 84 months (7 years) means she needs to replace $3,100 x 84 = $260,400 in total income over that stretch.

She would not need $260,400 sitting in the annuity on day one, because a period-certain SPIA's price already reflects the interest her premium keeps earning while it pays her. Using a hypothetical payout assumption, seven years of $3,100 monthly checks might cost in the ballpark of $225,000 today; the number you would actually pay depends on the carrier, your state and the date you get quoted. A MYGA could not run this exact play by itself either, since drawing more than $37,000 a year out of a $225,000 account would blow well past a typical 10% free-withdrawal limit.

Once Denise turns 70, her delayed Social Security benefit is sized to more than cover that $4,200 monthly need on its own. Our annuity bridge strategy guide goes deeper into building a plan like this one.

Notice what did the heavy lifting in that example: the insurer's own pricing, not Denise's savings account, absorbed the gap between $260,400 in total payments and roughly $225,000 in premium. That gap grows or shrinks with prevailing rates at the time she buys, which is exactly why a real quote at the time you are ready to fund a bridge matters more than any published estimate, including this one.

What today's bridge MYGA rates look like

MYGA rates move often enough that any table we printed here would be stale within days, so we keep current numbers off this page and in the quote tool instead, where a licensed strategist can pull live pricing from top-rated carriers for your state and deposit size.

Deposit size can move the rate band too. Carriers often reserve their best pricing for deposits of $100,000 or more, so it is worth asking where your amount lands before you assume a smaller MYGA will price the same as a larger one.

Two things matter more than the headline rate when you are shopping a bridge MYGA. First, check the free-withdrawal provision. A 10%-per-year provision on a $200,000 deposit gives you roughly $20,000 a year of penalty-free access, interest included, while a 0% provision locks the money until maturity, which is fine for a ladder rung but useless as an annual paycheck. Second, check whether the contract credits simple or compound interest. Simple interest is calculated on your original deposit every year and never compounds on interest already paid; compound interest grows on top of itself. As a hypothetical comparison, a 5.5% simple interest MYGA on $200,000 would pay a flat $11,000 a year, or about $917 a month, in predictable income, which is exactly the shape a bridge needs even though the same rate compounded would build more total account value by the end of the term. Neither structure is automatically better; it depends on whether you need the cash flow now or the larger balance later. Our simple vs. compound interest calculator and MYGA calculator can run both scenarios with real numbers.

What you should not use for a Social Security bridge

Variable annuities. These tie your account value to market performance, and a bridge is exactly the wrong place for that kind of swing. If the market drops 25% in year two of a 7-year bridge, your income plan is in trouble right when you need it least.

Fixed index annuities. Participation rates, spread fees and cap rates make it hard to plan predictable withdrawals over a short window. For a 5 to 7 year bridge, a plain MYGA is almost always the simpler, more transparent tool.

Whole life cash value. Cash value builds slowly, loan interest compounds against you, and borrowing against the policy tangles up the death benefit. A dedicated annuity, not a policy loan, is the cleaner way to fund a clean, predictable bridge.

Questions to ask before you buy a bridge annuity

Does the surrender period match your bridge length? If you are bridging for 7 years but buy a 10-year MYGA, you could face surrender charges trying to access more than the free-withdrawal amount in years 8 through 10. Line the surrender schedule up with your actual timeline.

What exactly is the free-withdrawal provision? Most MYGAs allow around 10% of account value per year without a penalty, but confirm whether that is based on your original deposit or the current account value, since the two can differ.

How strong is the carrier? Your bridge needs to pay reliably for the full stretch, so look for a rating of A- or better from AM Best. Ratings can move, so confirm the current one directly with the rating agency rather than relying on a number you saw somewhere else. The NAIC's consumer resources explain how state regulators evaluate an insurer's financial strength if you want to dig deeper.

Is there a return-of-premium death benefit? Most MYGAs include one, which means your heirs receive the remaining account value if you pass away during the bridge. Confirm it is part of your contract before you sign.

How bridge annuity income is taxed

If your bridge annuity is funded with after-tax money outside a retirement account (a non-qualified annuity), the interest grows tax-deferred while it accumulates. When you start withdrawals, interest comes out first and is taxed as ordinary income; your original principal comes back tax-free.

If you instead fund the bridge with IRA dollars (a qualified annuity), every withdrawal is fully taxable as ordinary income, since none of that money has been taxed yet. That still often makes sense, but it means your gross withdrawal has to be larger to net the same spendable amount after taxes. It also means the withdrawal counts toward the income the IRS looks at when it later figures whether your Social Security benefit itself is taxable, so the two decisions are not entirely separate. Talk with a tax professional about how bridge income fits into your specific bracket, and how it might interact with future required minimum distributions, before you commit.