Strange But True: Free Loan From Social Security (2024)

FAQs

What is a strange but true free loan from Social Security? ›

The brief's key findings are: An unconventional strategy allows individuals to use early Social Security benefits like a “free loan,” paying back the principal while keeping the interest.

Social Security will not give you a loan or let you borrow against your future benefits. You can't, for example, ask to borrow $5,000 and then simply have Social Security deduct that sum from your benefits once you start collecting them.

Some have claimed that the government's borrowing from Social Security is “stealing,” but Johnson explained to VERIFY that this is misinformation. According to the SSA, the government is obligated to pay back borrowed funds and has never failed to do so.

The idea of Congress stealing from Social Security and not paying interest is a complete myth. There are, however, tangible reasons for Social Security's struggles, many of which can be tied to long-running demographic shifts.

Have you heard about the Social Security $16,728 yearly bonus? There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.

You can take out a personal loan while receiving Social Security benefits. The loan proceeds will not affect Social Security retirement benefits. However, if you're receiving Supplemental Security Income (SSI) from Social Security, any loan proceeds you don't spend could count against you and reduce your benefits.

Bush financed income tax cuts and the Iraq war by plundering money from Social Security. These beliefs were attributed to the following statement: “Next time a Republican tells you that 'Social Security is broke,' remind them that Pres.

As a stop-gap measure, Congress passed legislation in 1981 to permit inter-fund borrowing among the three Trust Funds (the Old-Age and Survivors Trust Fund; the Disability Trust Fund; and the Medicare Trust Fund). This authority was to lapse at the end of 1982.

As of December 2022 (estimated), the intragovernmental debt was $6.18 trillion of the $31.4 trillion national debt. Of this $6.18 trillion, $2.7 trillion is an obligation to the Social Security Administration.

The Introduction of Taxes on Benefits

The rationalization for taxing Social Security benefits was based on how the program was funded. Employees paid in half of the payroll tax from after-tax dollars and employers paid in the other half (but could deduct that as a business expense).

Which party created Social Security? ›

Social Insurance Movement

The Progressive Party platform can be seen as the forerunner of the Social Security program that TR's cousin, Franklin Roosevelt, would successfully push through Congress in 1935.

If you have no record of paying into the system, you will not receive payouts. If you have not reported income and evaded taxes for a lifetime, then you have no right to Social Security benefits.

Money that the federal government borrows, whether from investors or from Social Security, is used to finance the ongoing operations of the government in the same way that money deposited in a bank is used to finance spending by consumers and businesses.

Interest-free loans are personal loans that let you borrow money without additional interest charges. This means you'll only be responsible for repaying the funds you borrowed. Sometimes these loans have specific eligibility requirements tied to what you use the loan for.

An introduction to social loans, a form of loan designed to finance activities and projects that address a social issue or achieve a positive social outcome for certain communities.

You can do so by signing up for direct deposit, which sends payments directly into your bank account. Or, you can have your benefits automatically deposited into your Direct Express® Debit MasterCard® account. Direct deposit is a simple, safe, and secure way to get benefits. What is the Direct Express® card?