Even though the Social Security system was written into law in 1935, payroll taxes weren’t collected to pay for the system until 1937. Originally, you had the choice of taking a lump sum or monthly payout. In the first 3 years, everyone took the lump sum, with Ernest Ackerman being the first American to receive a lump sum payment in 1937. He received a total of 17 cents and had paid 5 cents into the program.
The first monthly check was issued to Ida May Fuller of Ludlow, VT. She paid a total of $24.75 into the system for 3 years (1937, 1938, and 1939). The first monthly payment she received was for $22.54, and by her second check she had already received more out of Social Security than she had paid into the system. Over her lifetime, she collected just under $23,000 in total Social Security benefits having only contributed $24.75 – a return of over 92,000%.
Social Security Timeline
- 1935 The 37-page Social Security Act was signed on August 14, 1935 by President Franklin D. Roosevelt, Retirement benefits only being paid to worker, welfare benefits started
- 1937 The first Social Security Cards were issued by post offices – over 20 million were issued within the first year
- 1939 Two new categories of beneficiaries were added: spouse and minor children of a retired worker
- 1940 The first monthly benefit check was issued to Ida Mae Fuller for $22.54
- 1954 The Disability program was added to Social Security
- 1961 The early retirement age was lowered to age 62 at reduced benefits
- 1965 Medicare health care benefits were added to Social security—20 million joined within three years
- 1972 Supplemental Security Income (SSI) program was federalized and assigned to Social Security Administration
- 1975 Automatic cost of living adjustments (COLAS) were mandated
- 1980 Amendments were made in the Disability Program to help solve some problems with fraud
- 1983 Taxation of Social Security benefits was introduced; New Federal hires were required to be under Social Security, retirement age for younger workers increased to 66 and 67 years
- 2009 No Social Security Benefits for Prisoners Act of 2009 was signed