Claiming Social Security at 63 and Earning $60K? These 3 ETFs Help Replace the Withheld Check
The Social Security earnings test is quietly clawing back your early retirement check every month you keep working, but three ETFs can plug that gap with income that arrives on the same schedule as the benefit you’re losing.
You started collecting your Social Security benefit at 63, then kept your paycheck. Now the Social Security Administration is clawing back a chunk of that benefit because you’re over the earnings-test limit. The math stings: for every couple of dollars you earn above the annual cap while under full retirement age, the government withholds one dollar of benefits. That is exactly the gap three funds can help you fill: WisdomTree Floating Rate Treasury Fund (NYSEARCA:USFR), First Trust Rising Dividend Achievers ETF (NASDAQ:RDVY), and JPMorgan Equity Premium Income ETF (NYSEARCA:JEPI).
Why the Withheld Check Hurts Right Now
At a 4.00% upper-bound fed funds rate and a 2027 COLA tracking toward 3.3%, cash finally pays a meaningful yield, yet inflation still bites. You have a $60,000 salary plus a partial Social Security check. The goal is to replicate the withheld dollars in your brokerage account with three sleeves: one that acts like a high-yield savings buffer, one that grows your income over time, and one that pays you monthly like the check you’re missing.
USFR: Cash-Like Yield With Almost No Rate Risk
USFR holds U.S. Treasury floating-rate notes, so its coupon resets with short-term Treasury rates. When the Fed is holding above 4%, that shows up in the distribution. The fund pays monthly; the most recent payout was $0.16046 per share, with a trailing 12-month total of $1.88897. On a share price near $50.50, that represents real income without the volatility of long bonds. Duration is minimal because the notes reprice roughly weekly, so the principal barely moves. The 0.15% expense ratio means $998.50 of every $1,000 invested remains working for you. Year to date, USFR is up 2.84% in price on top of the coupon. Park cash reserves here.
Living costs keep rising, so a static income stream loses ground. RDVY screens for U.S. large- and mid-cap stocks with growing dividends, healthy payout ratios, positive earnings growth, and strong balance sheets, then equal-weights roughly 50 names. That results in a portfolio tilted toward semiconductor equipment leaders like Applied Materials (4.68%), Lam Research (4.42%), and KLA (4.14%), plus insurers and money-center banks such as Allstate, Travelers, Chubb, and JPMorgan Chase. Distributions land quarterly. The payout floats with company results, but the total-return engine has delivered strong performance: RDVY is up 15.71% year-to-date, 20.73% over one year, and 81.86% over five years. With $24.48 billion in assets, liquidity is not an issue.
JEPI: A Monthly Deposit That Looks Like the Missing Check
JEPI is the closest thing to a paycheck replacement available in a single ETF. The manager holds a low-volatility slice of large-cap U.S. stocks, then sells S&P 500 call options through equity-linked notes to generate premium income. That premium gets paid out monthly. The most recent distribution was $0.37142, and the trailing 12-month total is $4.58338. On a share price of $56.66, that is a high-single-digit yield delivered in 12 monthly payments, exactly matching the cadence Social Security uses. The fund is massive at $44.75 billion in net assets, with top holdings including Howmet Aerospace, Johnson & Johnson, Eaton, Trane Technologies, and Lam Research.
Trade-Offs Before You Commit
USFR income falls with short-term rates. When the Fed cuts, your monthly check shrinks. RDVY’s quarterly distribution is variable: the latest payout was $0.1474 versus $0.1813 the prior quarter, and the fund is down 2.35% over the past month. JEPI trades upside for income; in a ripping bull market, its total return will lag the S&P because the call-writing caps gains. YTD price appreciation is a modest 4.46%. None of these three replaces a permanent benefit reduction, but blended together, they provide cash-like safety, rising income, and a monthly deposit that arrives on schedule. That is the income structure the Social Security earnings test is prompting you to build.
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