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Stephanie O Joy, Esq
Stephanie O Joy, Esq, Soc. Sec. Attorney
Category: Social Security
Satisfied Customers: 13551
Experience:  22+ years legal exp. - 12+ years owning/operating her own SSD Law practice.
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Can a recipient of SS borrow from Social Security Interest

Customer Question

Can a recipient of SS borrow from Social Security Interest Free? Please provide the details if this program is still available.
Submitted: 1 year ago.
Category: Social Security
Expert:  Stephanie O Joy, Esq replied 1 year ago.

This was not a program per se, but an unitended 'result' of a process that the SSA provided for.

It USED to be that if we collected retirement benefits, say, for 5 years, we could decide to treat it as a loan (informally think of it that way), withdraw our application for benefits from 5 years ago, and pay back the money (like it was a loan) without having to pay back the interest value of having that money for 5 years. Thus, if we wanted to "borrow" money, put it in the bank, earn interest, we could then return the principal while keeping the interest we earned in the bank for ourselves. The reason for being able to withdraw the application and start over was generally to help those that unwisely, perhaps, started early reduced retirement, only later to find they'd wished they'd waited to collect so it would be the unreduced amount, even as much as 80% HIGHER if they waited til 70 instead of 62.

Well, some people were doing just that and the SSA realized that it is basically giving up money temporarily but earning NO interest (which means losing money, actually, since money depreciates). So, as of a few years ago,the rule is that you CAN withdraw an application if done within a year of making it, and you must return the moneys you received during that year. It is still interest free, but only a years worth (a payment for 12 of 12 months).

Expert:  Stephanie O Joy, Esq replied 1 year ago.

Form to request withdrawal of application

Expert:  Stephanie O Joy, Esq replied 1 year ago.

More info on this:

Expert:  Stephanie O Joy, Esq replied 1 year ago.

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