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Stimulus loan of $5,000
A report in the Washington Post has pointed to another proposal, one being made by the American Enterprise Institute and Hoover Institution and said to be under review by senior economists at the White House. In it, they say, households would receive cash, but not in the same way as they did with the previous stimulus checks. It would instead be a voluntary loan check of a value potentially up to $5,000, and that would be in exchange for their retirement benefits via social security being delayed for up to three months.
It sounds like you get $5000 and it covers your next 3 social security checks. Then you resume getting your benefits monthly. This would only get us our next three s.s. benefits up front. If a person had a s.s income of near $1700 a month it would be a wash. $5000 = 3 monthly benefits. If a person had a monthly s.s of $1000 then they would get a loan of only $3000. Is that the math any of you see?
Only if the interest rate is negative. Let’s see I’m a 25 year old, borrow $5K from Uncle Sugar at -2%, when I retire at 65 Uncle owes me $11K-$5K=$6K.
Of course Uncle Sugar has made deals in the past that turned sideways — as with WWI vets who were offered a bonus...
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I'm 67 and not yet collecting SS, still working. I don't need any stimulus $ but if I did, my SS at 70 will be $3,200/month, so I'd be getting screwed if I got $5,000 and paid it back with $9,600.
Doesn’t make any sense for me. If I took the $5k now and invested it, it would be worth approximately 3 months of social security payments when I retire.
That assumes a reasonably high rate of return, and a low rate of inflation.
It makes no sense to me to take on additional risk and effort in the hopes of breaking even.
If the loan was instead of our next three months SS we'd come out ahead a little since 3 x SS is under $5000. I think the article said it would be on a volunteer basis. Already retired we'd take it. The group that proposed it have never been heard of by us but it sounds like the White House has their ears open. That type loan would not increase the national debt.
Stimulus loan of $5,000
A report in the Washington Post has pointed to another proposal, one being made by the American Enterprise Institute and Hoover Institution and said to be under review by senior economists at the White House. In it, they say, households would receive cash, but not in the same way as they did with the previous stimulus checks. It would instead be a voluntary loan check of a value potentially up to $5,000, and that would be in exchange for their retirement benefits via social security being delayed for up to three months.
It sounds like you get $5000 and it covers your next 3 social security checks. Then you resume getting your benefits monthly. This would only get us our next three s.s. benefits up front. If a person had a s.s income of near $1700 a month it would be a wash. $5000 = 3 monthly benefits. If a person had a monthly s.s of $1000 then they would get a loan of only $3000. Is that the math any of you see?
That might be true currently, but the plan in the linked article would allow a person not currently collecting SS to get $5,000 now in lieu of payments on future years. A 35 year old would be drawing on future SS that they would otherwise not see for another 30 something years.
In 30 something years, SS payments are going to be higher than $1,300/month simply because of inflation.
I doubt this will be to the benefit of many people in absolute terms.
That might be true currently, but the plan in the linked article would allow a person not currently collecting SS to get $5,000 now in lieu of payments on future years. A 35 year old would be drawing on future SS that they would otherwise not see for another 30 something years.
In 30 something years, SS payments are going to be higher than $1,300/month simply because of inflation.
I doubt this will be to the benefit of many people in absolute terms.
Also, they keep saying SS is running out of money. Won't this hasten the problem? Is this some deep plot to get rid of SS?
Yes and yes. The same situation would also occur under the proposed 7% payroll tax cut.
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Let’s see I’m a 25 year old, borrow $5K from Uncle Sugar at -2%, when I retire at 65 Uncle owes me $11K-$5K=$6K.
