9 Interesting Facts about Social Security
Posted by Donna Mae Scheib on October 09, 2017
9 Interesting Facts about Social Security
Social Security is something that Americans are aware of from birth. Unique numbers are given to us on a social security card that are deemed just as important as our birth certificate that stays with us our entire working lives. Older Americans reach their full retirement age at 66, where they are finally the ones receiving the monetary benefits that they had contributed to for those before them during their working years.
However, as time presses on, it can definitely be questionable whether this is an accepted form of social security or essentially, social insecurity. Political parties, various demographics of the American population, and the media all have different ideas of benefits and proposed changes necessary for the social security insurance program.
Let’s explore some historical insights and current facts about social security.
1. The Beginning
After the stock market crashed in 1929, which began the onset of the Great Depression, various government-sponsored programs began to form to help the American people get back on their feet. One of these programs was the social security program that was designed by President Franklin D. Roosevelt to give a safety net of protection against poverty in old age. Roosevelt signed the act into law on August 14, 1935.
2. Registration Process
The U.S. Post Office helped distribute applications for applying for a social security number. John David Sweeney, Jr. of New Rochelle, NY held the first registered SSN account and Grace Dorothy Owen of New Hampshire held the lowest number ever issued: 001-01-0001.
3. More than just a safety net
The intention of the passed Social Security Act was to aide and assist alongside other forms of financial support such as personal savings and pension plans. However, by 1994, “40 percent of all income received by older people was from Social Security” (Hillier & Barrow, 2015; Quadagno, 2008).
4. Implementing COLA and the automation process
The 1950 and the 1972 amendment to the Social Security Act, existing and future beneficiaries would now see increases with Cost of Living Allowances (COLA) to help with inflation and the increase of living. Before, a person who received a social security payment, let’s say from the beginning in the late 1930s, would have received the same amount essentially month after month, for ten years. The 1972 amendment automated the COLA process.
5. The checks and balances remain unequal
With the increased life expectancy and the increased amount of older adults, the social security blanket spreads thin as payroll taxes and income taxes on benefits fail to balance the amount of workers to retiree ratio. In the beginning, for example, 42 workers supported one retiree, and now, it’s just 3 taxpayers support its one retiree with future projections lowering the ratio to 2:1 in the next ten years.
6. Introduction of Medicare
President Lyndon B. Johnson signed the Medicare bill as part of an amendment in 1965. Within the first 3 years of the program, there were nearly 20 million beneficiaries enrolled. Today, the total amount of Medicare beneficiaries is around 55.3 million; 46.3 million beneficiaries are older Americans while the other 9 million are disabled.
7. Statistics
Today, 1 in 6 Americans receive a Social Security benefit. Older Americans make up most of this demographic, where another one-fifth of beneficiaries receive disability or young survivor benefits.
8. Benefits today
In June 2017, the average social security retirement benefit was around $1,322 per month. The United States ranks low compared to other stabilized, advanced countries. If a person retires at the age of 65 as of 2017 and they had worked their whole lives, the United States social security program would replace around 38 percent of working year’s earnings.
9. Older Americans rely on social security
Income from social security is the most common income among all races, and two in 5 older Americans would be below the poverty line if they were not receiving Social Security payments.
Though there are various conflicts and proposals about how to continuously approve our country’s social security program, it is noteworthy that this safety net is an important feature for millions of people to remain stable financially at an older age.
References
Fast facts about medicare. (2015). Retrieved from http://www.ncpssm.org/Medicare/MedicareFastFacts
Hillier, S. M., & Barrow, G. M. (20145). Aging, the Individual, and Society (10th ed.). Mason, OH: Cengage learning.
Historical background and development of social security. (n.d.). Retrieved from Social Security Administration website: https://www.ssa.gov/history/briefhistory3.html
Policy basics: top ten facts about social security. (2017, August 14). Retrieved from Center on budget and policy priorities website: https://www.cbpp.org/research/social-security/policy-basics-top-ten-facts-about-social-security
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