The Social Security program is one of the most important parts of the U.S. government’s support system for older Americans.
It provides monthly income to retirees, disabled workers, and survivors of deceased workers. But how and when did it all begin?
This guide explains the history of Social Security, key milestones, and how the program has evolved since its creation.
When did the Social Security program officially start?
The Social Security Act was signed into law on August 14, 1935, by President Franklin D. Roosevelt.
It was part of the New Deal, a series of programs created to address the economic crisis caused by the Great Depression.
The law established a federal system of old-age benefits for workers and laid the foundation for today’s broader Social Security system.
Why was Social Security created?
During the Great Depression, millions of Americans lost their jobs, homes, and savings.
Many older workers had no income or retirement savings and faced poverty in their later years.
The government responded by designing a permanent program to protect people from falling into poverty after retirement.
Social Security was created to provide economic security for older citizens and their families.
Its original purpose was simple: to ensure retired workers could receive a basic income for life after they stopped working.
When did people start receiving Social Security payments?
The collection of payroll taxes began in 1937, and the first monthly payments were issued in January 1940.
Before that, one-time lump-sum payments were made to a few thousand beneficiaries who had paid into the system but reached retirement age before monthly benefits started.
The very first monthly Social Security check was issued to Ida May Fuller of Vermont in January 1940.
She received $22.54 for her first payment and eventually collected a total of $22,888, far more than she paid into the system.
How was Social Security funded at the beginning?
From the start, Social Security was designed as a pay-as-you-go system.
That means current workers and their employers pay taxes into the system, and the money is immediately used to pay benefits to retirees.
In 1937, workers contributed 1 % of the first $3,000 of their annual income, matched by an equal contribution from employers.
Over the decades, those rates and income limits increased as benefits expanded and the number of beneficiaries grew.
What major changes have shaped Social Security over time?
Since 1935, Congress has amended the Social Security Act many times to expand benefits and eligibility.
Some key milestones include:
- 1939: Benefits were extended to spouses and children of retired workers and to survivors of deceased workers.
- 1956: Disability Insurance was added, providing benefits to disabled workers.
- 1965: Medicare was introduced under the Social Security Act, giving health insurance to older Americans.
- 1972: Automatic cost-of-living adjustments (COLA) were added to keep benefits in line with inflation.
- 1983: Major reforms strengthened the program’s finances by gradually raising the retirement age and increasing payroll tax rates.
How has the program grown since it began?
When Social Security started in 1940, about 222,000 people received benefits. Today, more than 67 million Americans receive monthly payments.
The program now supports retired workers, disabled individuals, dependents, and survivors.
The Social Security Trust Funds hold more than $2 trillion in reserves, although reports from the Social Security Board of Trustees indicate that the funds could be depleted by the mid-2030s if no changes are made.
Even then, payroll taxes would still cover most benefits, but at a reduced rate.
Why is Social Security still important today?
Social Security remains a critical part of retirement income for millions of Americans.
For about half of retirees, it provides at least 50 % of their income. For one in four seniors, it provides 90 % or more of their income.
Beyond retirement, the system offers protection for workers who become disabled and for families who lose a breadwinner.
In short, it serves as a social safety net that continues to reflect the same goals set in 1935, providing financial stability and dignity in old age.
