Strange But True: Free Loan From Social Security

Disclaimer: The U.S. Social Security Administration substantially limited the use of the “free loan” strategy in 2010, see press release | federal ruling

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.
• If this strategy were widely adopted, it would cost Social Security $6 billion to $11 billion per year today and more in the future.
• The strategy primarily benefits higher income individuals, who have the financial resources to invest their benefits and tend to be in better health.