Why Borrow Against Social Security Funds is a Bad Idea

Recently, there has been talk about allowing people to borrow from their Social Security funds. This step is an effort to provide people with additional cash. It requires up to a $5,000 increase in Social Security directly in exchange for the previous three months of advantages. The current pandemic is a shock and is unlike anything people have experienced, but touching Social Security is not the resolution.

The Reason for Not Borrowing Against Social Security Funds

For countless Americans, Social Security is a single source of collecting retirement assets. Without the additional comfort of a pension to fall back on, borrowing against Social Security funds benefits their worthiest retirement asset. Using these future retirement returns is a tricky transaction. It may solve a quick-term cash crunch, but it can set a strict criterion of placing American’s retirement security at risk.

History of Social Security

Social Security was formed in 1935 during the time that the nation was in the middle of the Great Depression. It was triggered by the stock market crash of 1929. The income plummeted, and unemployment climbed to 23% in the succeeding years. So in 1935, President Roosevelt confirmed the Social Security Act into law. He created a social security fund to give sustained benefits to retired workers age 65 or older post-retirement.

What Retirement Seems Like Today

Americans share 15.3% to their future Social Security and Medicare benefits through payroll subtractions every month. The Center on Budget and Policy Priorities said Social Security benefits contribute at least 90% of income for one in four retirees. Soon, retirees will locate themselves without guaranteed sources of income in retirement, relying solely on Social Security. It highlights one statement clearly that the American retirement plan is weak. The medial retiree family had an income of about $41,000 in 2017, including Social Security, but there is also a silver lining.

Social Security presents one of the most influential kinds of guarantees that modern retirees require. If people are living well into their 80s and 90s, then the dual hazard of wellness care costs and endurance make retirement costlier than ever before. So having the full funds that Social Security gives is crucial to retirees in having the means to overcome these expenses.

Rewiring Retirement

It has been found that most Americans do not have a secure retirement waiting for them at the end of their occupation. According to a recent survey, it was determined that 55% of baby boomers say their most significant anxiety is running out of capital in retirement. This also shows how essential it is to support the idea that Americans rewire their retirements. This is not a quick fix like the one dipping into Social Security advantages early would contribute.


You can not undervalue the importance of having a retirement plan. This is the benefit that covers government benefit elections like Social Security and Medicare. Saving is also a vital part of this program.