If you own a Medicare Supplement policy, your 2026 renewal notice probably did not read like good news. Some Medigap carriers are pushing premium hikes of up to 26% this year, and the math is stark: a policy that cost $180 a month becomes roughly $227, while the 2027 Social Security COLA is tracking at just 3.1%. The gap has to come from somewhere. For a retiree who wants that somewhere to be a portfolio rather than a savings account, three funds do most of the heavy lifting: Invesco S&P 500 High Dividend Low Volatility ETF (NYSEARCA:SPHD), iShares Core Dividend Growth ETF (NYSEARCA:DGRO), and WisdomTree Floating Rate Treasury Fund (NYSEARCA:USFR).
Each one solves a different piece of the puzzle. One pays you every month right now. One grows your income faster than premiums climb. One holds your emergency cash without giving up yield. Together, they turn a Medigap sticker shock into a line item you can actually fund.
SPHD: The Monthly Paycheck
SPHD holds the 50 highest-yielding S&P 500 stocks that have shown the lowest 12-month volatility, which means utilities, consumer staples, real estate, and regulated telecoms rather than speculative growth names. That mix is why retirees have gravitated to it. The ride is smoother, and the checks arrive on a schedule.
Invesco pays SPHD holders every month, 12 times a year. The July 2026 distribution was $0.21473 per share, and the trailing 12-month total came to $2.38571 per share. At a recent price of $52.71, that is roughly a 4.5% trailing yield, paid in monthly increments that line up neatly with a Medigap bill (we rounded up seven more monthly payers that fit this same role in a free report on stocks that pay every 30 days). Own about 1,000 shares and the fund throws off enough cash to cover a $200-a-month premium hike without touching principal. The 13.07% year-to-date total return is a welcome bonus on top of the income.
DGRO: The Raise That Beats Inflation
SPHD pays you today. DGRO makes sure your income is higher next year, and the year after that. The iShares Core Dividend Growth ETF screens for U.S. companies with at least five straight years of dividend increases, positive earnings, and a payout ratio below 75%. You end up with names like JPMorgan, Microsoft, ExxonMobil, and Johnson & Johnson doing the compounding for you.
The cost is almost invisible. DGRO charges an expense ratio of just 0.08%, meaning $9,992 of every $10,000 you invest stays working for you. And the dividends are climbing: annual payouts went from $1.316 in 2023 to $1.385 in 2024 to $1.4506 in 2025. As insurance companies raise rates, DGRO’s underlying companies raise dividends. Over ten years, the fund has returned 255.21%, so the capital has kept up too.
USFR: The Cash You Keep Yielding
You still need money you can grab this month for the premium invoice. USFR holds floating-rate U.S. Treasury notes whose coupons reset with short-term rates, so the fund captures today’s yields without the price whipsaw of longer bonds. With the 10-year Treasury at 4.63% and short rates still elevated, that reset feature is doing real work.
USFR pays monthly, with a trailing 12-month distribution of $1.91107 per share. Its expense ratio is 0.15%, so $9,985 of every $10,000 stays invested. The share price barely moves: up 2.44% year to date and 0.07% over the past week. That is what you want from the bucket paying next quarter’s premiums.
The Trade-Off Worth Naming
None of this is without risk. SPHD’s low-volatility screen keeps it out of the biggest tech winners, so in a raging bull market it will trail the S&P 500. DGRO’s dividend is quarterly, not monthly, and recent payments have been smaller than the $0.447036 December 2025 distribution because of normal seasonal variation. USFR’s yield falls when the Fed cuts. And all three carry equity or interest-rate risk that a bank CD does not.
Still, the design fits the problem. Persistent inflation, with CPI at 333.918 in July 2026, is not slowing Medigap carriers down. If your COLA cannot cover the increase, a portfolio that pays monthly, raises its payout, and parks cash safely is the closest thing to a private raise you can build.
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