At 65, Medicare Takes $202.90 a Month Off the Top. These 3 ETFs Build the Income to Cover It

Your first Medicare-era Social Security deposit can come as a surprise. Healthcare in retirement still costs money, and the bill shows up as a smaller check, which is easy to miss. According to a fact sheet, the Centers for Medicare & Medicaid Services set the standard monthly Part B premium at $202.90 for 2026. Three funds can build a separate income stream aimed at that expense: the JPMorgan Equity Premium Income ETF (NYSEARCA:JEPI), the Global X U.S. Preferred ETF (NYSEARCA:PFFD), and the iShares Short Duration Bond Active ETF (CBOE:NEAR).

Why Matching One Bill to One Income Stream Works

Think of the premium as a fixed recurring bill and give it a dedicated source of cash. When you know which holdings are covering your Medicare cost, you can judge more easily whether the plan is working. All three funds pay monthly, so the income arrives on the same schedule as the deduction.

Keep in mind that the premium gets reset every year. The CMS figure holds for one year only, so check it again each fall.

Income Trap That Could Raise Your Own Premium

Some people pay more than the standard premium. The Centers for Medicare & Medicaid Services adds an income-related monthly adjustment for individual filers with modified adjusted gross income above $109,000 and joint filers above $218,000. That income figure comes from a prior year’s tax return.

That creates a trap. If your income sits near a threshold, extra taxable distributions meant to cover the premium could push you over the line and raise the premium you were trying to pay (IRMAA is one of several Medicare surcharges we mapped in a free guide here: Medicare’s Hidden Bills). Where you hold these funds matters. Distributions inside a tax-sheltered account such as an IRA are treated differently from distributions in a taxable brokerage account. Talk to a tax professional before you add income in a taxable account.

JEPI: Your Main Monthly Income Source

JEPI holds a broad portfolio of large-cap U.S. stocks. It also holds structured notes issued by major global banks, which generate options income. No single stock makes up much more than 1.6% of the fund, and its net assets were about $44.7 billion as of June 30, 2026.

JEPI pays every month, but the amount changes. The most recent payout was $0.34134 per share, down from $0.37142 the month before, and payments this year have run as high as $0.44761. JEPI is up 7.05% over the past year on a total return basis. Selling options caps your upside when stocks rally hard, which is the trade-off.

PFFD: Second Stream With a Different Driver

Preferred stocks pay fixed dividends and sit between bonds and common stock in a company’s capital structure. PFFD holds preferred shares from banks, insurers, utilities, telecom, and real estate companies, with about $2.17 billion in net assets as of May 31, 2026.

Its payout has been steady. PFFD has paid $0.10 per share every month since April 2025, but that’s slightly down from earlier levels of $0.11. PFFD is also very sensitive to interest rates. With the 10-year Treasury at 5.28%, PFFD is down 4.1% over one year and 6.01% over five years on a total return basis. Credit risk matters too. Financial companies make up a large share of the fund, and its largest position was about 4.7% of assets.

NEAR: Money You Can’t Afford to See Swing

NEAR is for the part of your premium money that needs to stay steady. The active fund invests at least 80% of its assets in U.S. dollar-denominated investment-grade bonds and keeps maturities short, holding asset-backed, corporate, and government debt. Net assets were about $4.85 billion as of July 31, 2026.

Price moves have been small. NEAR is up 1.72% over the past year, and it has paid monthly since 2013. The most recent payout was $0.183979 per share. Short-term rates drive that income. The Federal Reserve’s target rate has an upper bound of 4.00%, so if the Fed cuts, NEAR’s payouts will likely shrink.

Trade-Offs to Weigh Before You Build This

None of these funds promises a set monthly amount. JEPI’s payout moves with market volatility. PFFD can lose value when rates rise or when banks come under pressure. NEAR has shown small price moves, but its income tracks the Fed. Meanwhile, the premium can change every year, and your own premium depends on your income.

You still get a clear structure. One fund supplies the main monthly income, one adds a second stream driven by different forces, and one holds money that needs to stay steady. If you’re facing a smaller Social Security check at 65, this setup gives the Medicare bill its own funding source. Before you start, check the CMS figures each year and look at which account will hold these funds.

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