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The case for borrowing against future social security wealth

Author

Listed:
  • Steve Swidler
  • Erin Cottle Hunt

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.

Suggested Citation

  • Steve Swidler & Erin Cottle Hunt, 2026. "The case for borrowing against future social security wealth," Contemporary Economic Policy, Western Economic Association International, vol. 44(1), pages 207-214, January.
    • Handle: RePEc:bla:coecpo:v:44:y:2026:i:1:p:207-214
    DOI: 10.1111/coep.12703
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    References listed on IDEAS

    as
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