Interesting Facts about Social Security

Interesting Facts about Social Security

For most of our working lives, the concept of Social Security has been a bit abstract. Yes, we notice it every time we look at a paystub or certainly when we go through the annual income tax filing process and, yes, we dream about the day when we finally reach the golden age of retirement and we begin to see a return on what we’ve paid in through the years. But for the most part it’s a largely intangible concept during our early and mid-life working years.

As we approach that retirement phase, or when other factors cause us to think about Social Security and its place in American history, many of us tend to wonder about the lesser-known background items related to this enormous system and its origins. Here are a few little-known facts about Social Security that tend to keep inquiring minds awake at night:

  • Social Security marked its 80th anniversary on August 12, 2015. The program was signed into law on that date by President Franklin D. Roosevelt.
  • Since its inception, over 450 million different Social Security numbers have been issued (about 5.5 million new ones each year).
  • Social Security numbers are not reused upon death.
  • The 3-2-4 structure of your Social Security number has a purpose: the first three digits represent where you’re from (prior to 1972, they identified the state where you originally applied, and after that they identified the zip code of your mailed application). The second two were originally assigned to facilitate physical filing in the Social Security office, and the last four are simply serial numbers within the area/group.
  • No Social Security numbers have ever been issued with 000, 666, or 900-999 as the first three digits, or zeros in the middle two or last four positions.
  • There are three different types of Social Security cards issued: the card issued to U.S. citizens and permanent residents; a “not valid for employment” version; and a “valid for work only with DHS authorization” version.
  • At its outset, Social Security pledged that the employee/employer withholding rate of 2% each, up to a maximum of $3,000 annually, would begin in 1949 and would never increase. That same pledge also indicated that eligible beneficiaries can get as much as $85 a month for life after age 65. (Of course, that was then, this is now!)

There are also some anecdotal items that have transpired during Social Security’s 80-year history, like the amusing tale of Hilda Schrader Whitcher. It seems her employer, E.H. Ferree Company of Lockport, NY elected to imitate reality by using her Social Security number on an insert in the wallets they were selling. Despite steps that were taken to ensure understanding that the insert was for display purposes only, more than 40,000 people claimed the number as their own. The result was chaotic for Mrs. Whitcher, who was subsequently issued a replacement number.

Interesting Facts about Social Security (continued)

Then there’s the recurring problem of accuracy in Social Security’s Death Master File. It was recently observed that this file lists at least 6.5 million active Social Security numbers belonging to people 112 years of age or older (the Gerontology Research Group reports that only 35 individuals worldwide are older than 112). Conversely, these records also indicate that more than 12,000 people each year are incorrectly declared dead, causing all manner of logistical difficulty in their daily lives.

So, it’s logical that with a program of this size there is an almost unlimited opportunity for interested parties to engage in lively conversation about the many nuances and details surrounding Social Security. Here are a few additional points that will help you be prepared to join in any impromptu debates you may encounter along the way:

  • 59 Million Americans received benefits in April 2015 (42 million retired workers, 6 million surviving spouses, and 11 million disabled workers)
  • The total amount paid out through Social Security in April, 2015 exceeded $72 million (the average monthly pay out was $1,219 per beneficiary)
  • The maximum monthly payout to individual recipients is $2,366
  • Cost of Living Adjustments (COLA) were first initiated in 1972, and currently use CPI-W (Consumer Price Index for Urban Clerical and Wage Earners) as its factor
  • People with lower incomes receive higher ratios of annual benefits to taxes.
  • For workers who earned average wages and retired at the age of 65 in 1980, it took 2.8 years of receiving old-age benefits to recover the value of their payroll taxes (including interest). For workers who retired in 2003, it will take 17.4 years. For workers who will retire in 2020, it will take 21.6 years. This assumes Social Security will have enough money to pay scheduled benefits for this entire period, which it is not projected to have. [1]
  • “Social Security replaces about 40 percent of an average wage earner’s income after retiring, and most financial advisors say retirees will need 70 percent or more of pre-retirement earnings to live comfortably.” [2]
  • All taxes that have been paid into the Social Security system since its inception have already been (1) spent to pay for benefits, (2) spent to fund the administrative overhead of the program, or (3) loaned to the federal government.[3]



Interesting Facts about Social Security (continued)

Through history, there have been a number of unique and celebrated people surfacing in the annals of Social Security. Among them are:

Ackerman, Ernest ·      First recipient of a lump-sum Social Security benefit check. In January, 1937 he received a check in the amount of 17 cents…a return on his total investment of 5 cents.
Altmeyer, Arthur J. ·      Part of the committee to draft the original legislative proposal in 1934

·      Member of the Social Security Board from 1937-1953

·      One of the few responsible for how Social Security exists today

Burns, Eveline N. ·      Economist and educator at Columbia University

·      Member of the Committee on Economic Security in 1934 working on employment security issues

·      Authored three books on Social Security

·      First training consultant to the Social Security Board in 1936

Epstein, Abraham ·      Early advocate of Old Age Security

·      His “European Plan” for social security was adopted by New York in 1935

·      Advocated for Social Welfare and Unions

·      Criticized Social Security Act for failing to provide government contributions, leaving unemployment to states, and creating its large reserve fund that reduced spending power

Fuller, Ida May ·      First person to receive monthly benefit pay outs

·      First check on January 31, 1940 for the amount of $22.54

Fuller, Mary Falvey ·      One of the first two Public Trustees appointed as non-government overseers of Social Security and Medicare Trust Funds
Jaffe, Suzanne Denbo ·      One of the first two Public Trustees appointed as non-government overseers of Social Security
Perkins, Frances ·      Appointed as Franklin Roosevelt’s Secretary of Labor in 1933

·      First woman to hold a cabinet position in the United States

·      Played key role in writing New Deal legislation, including minimum wage laws

·      Involved in every aspect of creating the Social Security Act of 1935

Roosevelt, Franklin D. ·      Signed the Social Security Act on August 14, 1935

·      Previously enacted a law as governor of New York to provide old-age pensions

Winant, John G. ·      Appointed as the first head of the Social Security Board in 1935 by Franklin Roosevelt

·      Held the position until 1937

Witte, Edwin E. ·      “Father of Social Security”

·      Worked tirelessly as both a professor and a public servant

·      First president of the Industrial Relations Research Association in 1948 and president of the American Economic Association in 1956





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