Social Security History

Earnest AckermanEven 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.

 

Ida May FullerThe 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