Development of Social Security
By Nathan C. Weaver, CPA, Manager
Social Security is a source of income people receive because they have retired, are unable to work due to disability or are the surviving dependents of a deceased employee. Social Security is paid out monthly to qualifiers, and in order to receive the benefits for the retirement program you must be at least 62 years old and have been employed for 10 or more years.
After researching this program, I learned about the history of Social Security and it’s development over the years.
A few interesting facts are:
- From 1937 to 1942, Social Security was supposed to pay out a single lump-sum refund payment to eligible recipients. However, this was cut short in 1939 when an amendment increased the benefit amount and accelerated the start of monthly benefit payments from 1942 to 1950.
- The very first Social Security lump-sum refund recipient retired after one day of participating in the Social Security program. The total amount paid in was $0.05 and the lump sum payment was $0.17.
- Monthly benefits were first issued on January 31, 1940. The amount received by the first recipient was $22.54.
- Cost of living increases did not factor into Social Security payments until 1950. In 1975, the cost of living adjustments were tied to annual increases in consumer prices and the adjustments were completed automatically.
- In 2000, the full retirement age test regarding the reduction of Social Security for those at or above full retirement age was eliminated. At the time, there was around 900,000 individuals who were at or above full retirement age, working, and having their Social Security Benefits reduced because they were working.
Today, the Social Security program is often mentioned in the news regarding funding status and possible future steps.
Visit ww.usa.gov if you would like to calculate your estimated earnings for Social Security or sign up today to receive Social Security benefits.
To learn more about the development of Social Security over the years, visit www.ssa.gov/history.