How the Social Security Bridge Strategy Works
This is how you can wait until age 70 to start collecting Social Security — and capitalize on the annual 8% boost to your benefit.


Wish I could take credit for this article, but I must admit this concept came from something a client sent me the other day. I know a lot of people struggle with when to take Social Security. There are many things to consider when collecting Social Security.
Although today’s article focuses on one specific strategy, it is important to note that you should really consult with your adviser and consider the specifics of your finances before choosing.
OK, now that my public service announcement is complete, let’s get into things, shall we? When considering Social Security, some of the things worth thinking through are as follows.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
What to consider when taking Social Security
Life expectancy. Now I know no one has a crystal ball, but we do have a family history and a decent understanding if we are super healthy or have myriad health issues. This is certainly relevant, as you want as much return on investment (ROI) on what you’ve paid into Social Security.
Income. If you are currently working, this is something to consider when taking your benefit. There is generally a handful of negative tax implications if you’re at a certain age, working and also taking your Social Security benefit.
Spouse status. A big deciding factor should be your spousal situation. Not only if you have one or not, but what is their benefit likely to be? Remember, if there is no working history for them, there is a good chance they’ll be collecting based not only on your earnings but when you take your benefit.
Investments and expenses. Another large consideration should be what your investment portfolio and family’s expenses tend to be. This can help determine the appropriate timing and how long you may be able to wait in the first place.
The Social Security bridge strategy
Now that I’ve given you some fodder to chew on, I want to turn your attention to the topic at hand — the bridge strategy. I want to preface again that this isn’t a recommendation, but rather, a strategy I more recently learned about that I feel is worth sharing.
The concept is simple. For context, it is important to remember that you can start collecting at age 62, which is considered collecting early. The latest you can collect — or I should say the age at which your benefit will be at its maximum — is age 70. Everyone has their full retirement age (FRA), which is technically the age at which you can collect 100% of your stated benefits (66 or 67, typically). If you collect early, you’ll be collecting roughly 70% of your benefit forever, albeit starting four to five years earlier. Conversely, if you wait until age 70 to collect, you’ll be receiving roughly 132% of your FRA benefits.
The simple math is that every year you wait to take your benefits, they grow an additional 8%. Here is where the bridge strategy comes into play. Instead of taking Social Security early, which many tend to do, you can instead start to take money out of your IRA/401(k) at the same amount your Social Security benefit would be.
This, in turn, has the same impact on your income as if you were to be taking Social Security. The benefit here is by doing so you know your benefit is growing 8% year over year (ROI) until you turn it on. The key, of course, is not to take more money than your Social Security benefit. Additionally, it would behoove you to pull these funds from more conservative investments within your accounts, as they are much less likely to surpass the annual 8% rate of return needed to eclipse the Social Security growth.
Here’s an example of the bridge strategy
Example: Mrs. Jablowski’s Social Security benefit at age 62 is $2,572 a month; at age 70, it would be $4,555 a month. On Mrs. Jablowski’s 62nd birthday, instead of turning on her Social Security, she takes $2,572 each month out of her IRA and defers her Social Security. She does this each year until age 70. At age 70, she stops withdrawing from her IRA and flips on her Social Security benefit, collecting a $4,555-a-month benefit, having received 8% growth each year on her benefits all the while.
That, my friends, is what they call the bridge strategy for Social Security. I personally find it quite interesting and can see circumstances where it would make sense and others where it wouldn’t. In any event, I think it is worth sharing as one more thing to consider in the age-old riddle of when is the optimal time to collect your Social Security.
Hope you all enjoyed this little nugget of knowledge, and as always, please stay wealthy, healthy and happy.
Diversified is a registered investment adviser, and the registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC.
A copy of Diversified’s current written disclosure brochure which discusses, among other things, the firm’s business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov.
Diversified, LLC does not provide tax advice and should not be relied upon for purposes of filing taxes, estimating tax liabilities or avoiding any tax or penalty imposed by law. The information provided by Diversified, LLC should not be a substitute for consulting a qualified tax advisor, accountant, or other professional concerning the application of tax law or an individual tax situation.
Nothing provided on this site constitutes tax advice. Individuals should seek the advice of their own tax advisor for specific information regarding tax consequences of investments. Investments in securities entail risk and are not suitable for all investors. This site is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.
Related Content
- Three Social Security Changes in 2024 to Know
- Social Security Optimization If You Save More Than $250,000
- Three Factors to Consider Before Taking Social Security
- Here’s a Way to Save Social Security and Defer RMDs
- Three Common Social Security Misconceptions: Don’t Make a Claiming Mistake
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

In March 2010, Andrew Rosen joined Diversified, bringing with him nine years of financial industry experience. As a financial planner, Andrew forges lifelong relationships with clients, coaching them through all stages of life. He has obtained his Series 6, 7 and 63, along with property/casualty and health/life insurance licenses. Andrew consistently delivers high-level, concierge service to all clients.
-
Want To Retire at 55? See If You Can Answer These Five Questions
Who said you can’t retire at 55? If you say yes to these questions, you may be on your way to an early retirement.
-
I'm 57 with $4.1 million and looking to retire abroad in a few years. I no longer see the point in contributing to my 401(k). Am I wrong?
We ask financial experts for advice.
-
Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on Retirement
While some provisions might help, others could push you into a higher tax bracket and raise your costs. Be strategic about Roth conversions, charitable donations, estate tax plans and health care expenditures.
-
One Small Step for Your Money, One Giant Leap for Retirement
Saving enough for retirement can sound as daunting as walking on the moon. But what would your future look like if you took one small step toward it this year?
-
This Is What You Really Need to Know About Medicare, From a Financial Expert
Health care costs are a significant retirement expense, and Medicare offers essential but complex coverage that requires careful planning. Here's how to navigate Medicare's various parts, enrollment periods and income-based costs.
-
I'm a Financial Planner: Could Partial Retirement Be the Right Move for You?
Many Americans close to retirement are questioning whether they should take the full leap into retirement or continue to work part-time.
-
From Mortgages to Taxes to Estates: How to Prepare for Falling Interest Rates
As speculation grows that the Federal Reserve will soon start lowering interest rates, now is a good time to review your financial plans for housing, estate, taxes, investing and retirement to make the most of potential changes.
-
This Is How Lottery Winners Build Lasting Legacies, From a Financial Professional
Winning a massive lottery jackpot, like the recent $1.4 billion Powerball, requires seeking immediate legal and financial counsel, protecting your identity and winnings and planning your legacy.
-
I'm an Investment Strategist: This Is How the Fed's Next Rate Move Could Impact Your Wallet
Interest rate cuts might be coming, which could affect everything from your credit card debt to your mortgage. It's smart to prepare now — here's how.
-
I'm a Retirement Planner: These Are Three Common Tax Mistakes You Could Be Making With Your Investments
Don't pay more tax on your investments than you need to. You can keep more money in your pocket (or for retirement) by avoiding these three common mistakes.