Best Annuities for a Social Security Bridge (2026)

How to Use an Annuity as a Bridge to Social Security

Delaying Social Security from age 62 to age 70 increases your monthly benefit by roughly 77%. For someone who would receive $1,800/month at 62, that delay means $3,186/month for life instead. The math is compelling. The problem is practical: how do you cover your living expenses for those 7 or 8 years while you wait?

That is exactly what a Social Security bridge strategy solves. An annuity fills the income gap, replacing what Social Security would have paid, until your higher benefit kicks in at 70. This page walks through which annuity types work best, how to size your bridge, and what to avoid.

What Is a Social Security Bridge Strategy?

A Social Security bridge strategy uses a guaranteed income source – typically an annuity – to replace Social Security income during the years you delay claiming. The annuity pays you now; Social Security pays you more later.

The strategy works because the guaranteed growth in your Social Security benefit (8% per year between FRA and 70, via SSA delayed retirement credits) almost always exceeds the cost of funding the bridge. Your Full Retirement Age determines exactly how the math works for you.

Which Annuity Types Work Best for a Bridge?

1. MYGA (Multi-Year Guaranteed Annuity) – Best for Most People

A Multi-Year Guaranteed Annuity locks in a fixed interest rate for a set number of years – typically 3 to 10. For bridging to Social Security, a 5-year or 7-year MYGA is usually the right fit. Current MYGA rates range from 5.0% to 5.75% for 5-7 year terms. Check today’s best MYGA rates before you shop, because rates change weekly.

Robert, age 62, retires with $200,000 he wants to use as a bridge to age 70. He puts it into a 7-year MYGA at 5.5%. That earns approximately $11,000 in interest in year one alone. He can take 10% free withdrawals each year ($20,000 per year in principal access without surrender charges). Combined with interest, he has roughly $27,000-$31,000 available annually – about $2,250-$2,580 per month – before the account fully depletes around year 7 when Social Security kicks in at full value.

For a deeper look at what a larger MYGA can generate, see how much a $200,000 annuity pays and how much a $500,000 annuity pays.

Why MYGAs work well for bridges:

• Predictable, guaranteed growth – no market risk during the bridge period
• Tax-deferred interest – you control when you take income and pay taxes
• 10% annual free withdrawal provision on most contracts
• Surrender period matches the bridge period if you shop correctly

2. DIA (Deferred Income Annuity) – Best If You Know Exactly When You’ll Need Income

A Deferred Income Annuity is funded today, but income starts on a future date you choose. For bridge strategies, a DIA purchased at 62 with income starting at 65 or 67 can cover a portion of the bridge at a lower upfront cost than a MYGA. The trade-off is flexibility – once you lock in a DIA, the start date and payment amount are fixed.

A better DIA bridge approach: buy a DIA at 62 with income starting at 65, covering 62-65 with other savings, then Social Security covers everything from 70 onward. This layered approach requires careful coordination but can reduce total capital needed.

3. SPIA (Single Premium Immediate Annuity) – Best for Immediate, Certain Income

A single premium immediate annuity begins paying within 30 days of purchase. If you are already retired and need income right now, a SPIA can fund a precise bridge with no uncertainty about the payout. For a bridge strategy, a period-certain SPIA matched to your delay window – say, 7 years certain – can work cleanly. Use our immediate annuity calculator to run the numbers before committing.

For more on structuring annuities around your retirement income plan, see our full guide to best annuities for retirement.

Annuity Type Comparison: Which One Fits Your Bridge?

How Do You Calculate the Right Bridge Amount?

Start with your monthly shortfall, then multiply by the number of months you plan to bridge. Account for interest earnings and you will know how much you need to fund the annuity today.

Patricia, age 63, plans to retire now and delay Social Security until age 70. She needs $4,500/month to cover her living expenses. She receives $1,200/month from a small pension. Her monthly bridge shortfall is $3,300. She needs to bridge 84 months (7 years). Total gross income needed: $3,300 x 84 = $277,200.

With a MYGA earning 5.5% over 7 years, she does not need $277,200 upfront. Using a time-value-of-money calculation, Patricia needs approximately $220,000 today to generate $3,300/month for 84 months at 5.5% annual growth, drawing down both interest and principal to zero at month 84.

At 70, her Social Security benefit at the delayed rate more than covers her $4,500/month need. Learn more about constructing this type of income plan in our annuity bridge strategy guide.

Top MYGAs for a Social Security Bridge (May 2026)

The table below shows the highest-yielding 5-year and 7-year MYGAs currently available for deposits of $100,000 or more, from carriers rated A- or better by AM Best. These are the products best suited for a Social Security bridge strategy.

Best 5-Year MYGAs for Bridge Strategies

Best 7-Year MYGAs for Bridge Strategies

Rates last verified: May 1, 2026. Sourced from AnnuityRateWatch. top annuity companies (AM Best A- or better) only. Rates vary by state and deposit size. We update this table monthly or when significant rate changes occur. View all current MYGA rates.

What Should You NOT Use for a Social Security Bridge?

Variable Annuities: These tie your account value to market performance. If markets drop 25% in year two of your 7-year bridge, your income plan collapses. A bridge strategy requires predictability, not market exposure.

Fixed Index Annuities (FIAs): FIAs carry participation rates, spread fees, and cap rates that make withdrawal planning difficult. For a 5-7 year bridge, the simplicity of a MYGA is almost always superior.

Whole Life Insurance Cash Value: Whole life cash values build slowly, loan interest compounds, and the interaction with the death benefit adds complexity. For a clean, predictable bridge, you want a dedicated annuity, not a loan from a life insurance policy.

What Questions Should You Ask When Shopping for a Bridge Annuity?

1. Does the surrender period match my bridge period? If you are bridging 7 years and you buy a 10-year MYGA, you will face surrender charges if you need to access more than the free withdrawal amount in years 8-10. Match the surrender schedule to your timeline.

2. What are the free withdrawal provisions? Most MYGAs allow 10% of the account value per year without surrender charges. Confirm the exact percentage and whether it is based on original deposit or current account value.

3. What is the carrier’s financial strength rating? Your bridge annuity needs to pay reliably for 5-7 years. Look for carriers rated A- or higher by AM Best. The NAIC Buyer’s Guide for Annuities explains how to evaluate insurer financial strength before you buy.

4. Is there a return-of-premium death benefit? Most MYGAs include this, meaning if you die during the bridge period, your heirs receive the remaining account value. Confirm it is included.

How Are Bridge Annuity Withdrawals Taxed?

For MYGAs funded with after-tax dollars (non-qualified money), the interest grows tax-deferred during the accumulation phase. When you withdraw, interest comes out first and is taxed as ordinary income. Principal is returned tax-free.

If you fund the bridge with IRA money (qualified funds), 100% of every withdrawal is taxable as ordinary income. That is still often fine, but it means your gross withdrawal needs to be higher to net the same spendable income after taxes.

For a broader look at retirement income planning, the DOL: Taking the Mystery Out of Retirement Planning is a useful free resource that covers income sequencing and tax considerations in plain language.

Sources and Further Reading:

• CBO: Social Security Policy Options (2024)
• NAPFA: Find a Fee-Only Advisor for Bridge Planning
• AARP: How Delayed Retirement Credits Work