ORIGINAL ARTICLE
The case for borrowing against future social security wealth
Steve Swidler,
Erin Cottle Hunt,
Corresponding Author
Steve Swidler
Economics Department, Simon Center, Lafayette College, Easton, Pennsylvania, USA
Correspondence
Steve Swidler.
Email: [email protected]
Search for more papers by this authorErin Cottle Hunt
Economics Department, Reed College, Portland, Oregon, USA
Search for more papers by this authorSteve Swidler,
Erin Cottle Hunt,
Corresponding Author
Steve Swidler
Economics Department, Simon Center, Lafayette College, Easton, Pennsylvania, USA
Correspondence
Steve Swidler.
Email: [email protected]
Search for more papers by this authorErin Cottle Hunt
Economics Department, Reed College, Portland, Oregon, USA
Search for more papers by this authorFirst published: 10 June 2025
Abstract
In perfect credit markets, borrowing against future income could help households smooth consumption and invest in education, housing, or health. Investments in human capital, housing, or health could propel households to higher life-cycle earnings. Nevertheless, with lower earnings and little wealth accumulation, households most in need of financial resources are likely limited to higher cost loans or denied altogether access to credit markets. We propose allowing individuals to borrow against their future Social Security benefits by taking a lump-sum payment in exchange for reduced benefits during retirement. Examples illustrate possible loan amounts available to workers of different ages and earnings.
Open Research
DATA AVAILABILITY STATEMENT
The data that support the findings of this study are publicly available in the 2021 Annual Statistical Supplement to the Social Security Bulletin at https://www.ssa.gov/policy/docs/statcomps/supplement/2021/index.html, and from the 2016 Social Security Actuarial Life Tables at https://www.ssa.gov/oact/STATS/table4c6_2016.html.
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