Social Security advocates are going crazy over something supposedly being considered by the Trump administration as explained below. As you may expect, the opponents are misleading to the max.
What the Administration is trying to do is get money in Americans hands now without adding to deficits. It’s both perfectly logical and impractical in today’s political environment or to think all workers would act responsibly.
Taking a loan from a retirement plan is hardly new. Congress just made loans easier to take under 401k plans. In New Jersey state workers have been taking loans from their pensions for decades.
The idea does not undermine Social Security, it would be an option, but I can just imagine the surprise when the worker has to pay it back.
One proposal the White House is reportedly considering calls for letting Americans take up to $5,000 from Social Security now in exchange for delaying their benefits in the future.
The $5,000 would be structured as a loan with a government-set interest rate that would reimburse the Social Security trust fund with interest. Individuals who opt into the program would pay that money back when they start collecting Social Security benefits. Their first checks would go toward repaying the loan, for a period of up to three months. After that, they would receive normal benefits. As reported by CNBC