Medicare Part B Went Up 9.7% This Year. Your Social Security Raise Was 2.8%. These 3 ETFs Close the Gap
Quick Read
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Medicare Part B costs jumped 9.7% in 2026 while Social Security benefits rose just 2.8%. That mismatch means retirees may need their portfolios to generate the additional income their COLA is not providing.
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VIG, SPHD, and PFF attack the income gap from three different directions. VIG emphasizes long-term dividend growth, SPHD provides higher monthly distributions, and PFF adds preferred-stock income with a forward yield around 5.6%.
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The combination balances income today with income growth tomorrow. SPHD and PFF can help cover current Medicare costs, while VIG provides the stronger growth component designed to keep future portfolio income rising.
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The 2026 retirement math is brutal. Your Social Security check went up 2.8%. Your Medicare Part B premium climbed to $202.90 a month, an increase of $17.90 from $185.00 in 2025, roughly 9.7% higher. That is the third straight year Medicare has taken a bigger bite than the raise the government sent to feed it, and the 2027 COLA is currently tracking around 3.1%, which will not fix the trend. If your income is fixed, the offset has to come from your portfolio. Three ETFs are built for exactly that job: Vanguard Dividend Appreciation ETF( NYSEARCA:VIG ), Invesco S&P 500 High Dividend Low Volatility ETF( NYSEARCA:SPHD ), and iShares Preferred and Income Securities ETF( NASDAQ:PFF ). Each closes the gap from a different angle: rising dividends, high monthly cash flow, and preferred-stock income.
What Happens After A $1,000,000 Retirement?
How do you continue to grow a seven-figure portfolio in retirement? The last thing you want is to run out of money, you want your money to generate lasting income while you enjoy your life.
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Why the Gap Keeps Widening
Social Security's cost-of-living adjustment is tied to CPI-W, the inflation index that weights wage-earner spending. Medicare Part B premiums are set separately, based on projected physician spending and utilization. When healthcare inflation runs hotter than general inflation, retirees get squeezed, and the Part B line is only one of several surcharges that quietly widen the gap (we mapped IRMAA and the other Medicare traps in a free guide here: Medicare's Hidden Bills). You cannot vote your way out of that math this year, but you can rebuild your income stack so the raise you actually keep is bigger.
VIG: Income That Grows Faster Than Your Premiums
VIG tracks large U.S. companies with a long history of raising their dividends. It is the cheapest way to own dividend growth in the market. The expense ratio is 0.04%, meaning about $999.60 of every $1,000 you invest stays working for you. The forward yield is modest at roughly 1.6%, based on an annualized forward distribution of $3.9952 against a current price near $244.39. The payoff is the growth curve. The most recent quarterly distribution was $0.9988, versus $0.7692 in March 2024 and $0.288 a decade earlier. That is a raise that compounds. VIG has also returned 17.59% over the past year and 246.94% over the past ten, so you are not sacrificing appreciation for the growing paycheck. Distributions are quarterly.
SPHD: High Monthly Income From Defensive Blue Chips
SPHD holds the roughly 50 highest-yielding, lowest-volatility stocks in the S&P 500, tilting toward utilities, consumer staples, and real estate. It pays every month, which lines up nicely with a Medicare premium that hits every month. The latest distribution was $0.21963, with a trailing 12-month total of $2.4435 and an annualized forward distribution of $2.63556. Against a current price near $53.28, that puts the forward yield near 4.95%. The volatility screen has helped in choppy markets. SPHD is up 15.19% year to date and 13.02% over the past year. Think of it as your monthly-paycheck sleeve.
PFF: Preferred-Stock Yield for the Fixed Bills
PFF holds preferred securities from U.S. banks, insurers, and utilities. Preferreds sit between bonds and stocks: higher fixed payouts than common shares, but less price upside. The expense ratio is 0.45%. Distributions arrive monthly and vary; the latest was $0.142313, with an annualized forward distribution of $1.707756. Against a current price around $30.66, the forward yield is roughly 5.6%. That is the richest of the three, and the reason PFF earns a slice of a retiree book.
Trade-Offs You Need to Know
None of these funds are without risk. VIG's headline yield is small, so if you need cash today, it cannot carry the whole load. SPHD's utility and staples tilt lags in growth-led rallies, and the individual monthly payouts drift (the latest is $0.21963, versus $0.16181 a year earlier). PFF is the yield workhorse but the price does not grow much: it is up 1.49% year to date and 33.85% over ten years. Preferreds are also rate-sensitive; if long yields spike, PFF's price drops.
However, owned together, these three do what one fund cannot. VIG grows your future income faster than Medicare grows your premium. SPHD writes you a monthly check today. PFF piles on the yield to cover the shortfall between them. That is how you close a 9.7% gap with a 2.8% raise, without touching principal.
What Happens After A $1,000,000 Retirement?
How do you continue to grow a seven-figure portfolio in retirement? The last thing you want is to run out of money, you want your money to generate lasting income while you enjoy your life.
Learn seven strategies high net worth investors use with new report: The Seven Secrets of High Net Worth Investors from Fisher Investments. Get your guide here (sponsor)
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