Social Security might seem like one of those things everyone knows, but most of us are only scratching the surface. The truth is, there are surprising twists and stories behind how it started and evolved over the decades. Some of it will make you raise an eyebrow, and some might even change how you think about retirement. Here are ten facts you probably missed.
Thomas Paine’s 1795 Proposal Sparked Social Security Ideas
Back in 1795, Thomas Paine, the political activist and author of “Common Sense”, suggested an idea similar to Social Security. In his pamphlet, “Agrarian Justice”, he proposed taxing inherited property to provide financial support for elderly people and young adults starting life. Though never implemented, his ideas influenced future social insurance programs.
The First Social Security Act Wasn’t About Retirement
Most people think Social Security started with retirement benefits, but that’s not true. The 1935 Act was mainly about helping unemployed workers and dependent children survive the Depression. Retirement benefits didn’t arrive until 1939. Still, this law laid the groundwork for the Social Security system millions rely on now.
Social Security Numbers Were Almost Letters And Numbers
In 1935, the Social Security Board considered using a mix of letters and numbers for Social Security numbers. After consulting other federal agencies, they decided on a simpler nine-digit system. This choice made tracking earnings and benefits much easier. Today, the same nine-digit format is still used by millions of Americans.
The First Social Security Tax Was Collected In 1937
You might not realize it, but Social Security taxes didn’t start immediately. In January 1937, Americans began payroll contributions, and the first benefits were paid that same month. All the money went into the Social Security Trust Fund, which was set up to safely handle the program’s finances and keep it running smoothly.
Social Security Benefits Were Initially Paid In Lump Sums
Here’s something interesting: Social Security didn’t start out with monthly checks. Early on, workers got a lump-sum payment calculated from their earnings. It wasn’t until 1940 that monthly benefits began. This change provided a steady income by helping people plan better and depend on Social Security as a real part of their finances.
The Social Security Board Was Abolished In 1946
Most people don’t know the Social Security Board no longer exists. In 1946, it was replaced by the Social Security Administration to improve efficiency and simplify operations. Even now, the SSA is responsible for administering Social Security, which supports millions of Americans annually.
Social Security Originally Covered Only Certain Workers
Social Security wasn’t universal at first. The original program applied only to workers in commerce and industry. Coverage expanded over the years, and by 1950, amendments added around 10 million additional workers. These expansions made Social Security a more reliable safety net and offered broader financial protection to American workers.
The First Annual Report Was Never Published
The first Social Security report, completed in 1941, did not get published right away. Eventually, the SSA made it available to the public. It provided a glimpse into the program’s financial status and showed that, from the start, transparency was a challenge that Social Security had to work through.
Social Security Benefits Were Taxed Starting In 1984
Social Security benefits weren’t always taxed. That changed in 1984 when the 1983 Amendments allowed certain benefits to be included in taxable income depending on recipients’ earnings. The goal was to address funding shortfalls, representing a major change in the way Social Security benefits were handled for tax purposes.
Social Security’s Trust Fund Was Established In 1940
The Social Security Trust Fund, created in 1940, holds payroll tax revenues and manages them for the program’s long-term stability. By separating these funds, the government could ensure benefits were reliably paid. The Trust Fund has also remained a cornerstone of Social Security, funding ongoing benefits for millions of Americans.
