Social Security started on August 14, 1935, the day President Franklin D. Roosevelt signed the Social Security Act into law. That signing created the legal framework, but the program came to life in stages: Social Security Numbers were issued beginning in 1936, payroll taxes started in 1937, and the first monthly retirement check went out in January 1940.
The 1935 Act
By the mid-1930s, personal savings had been wiped out across much of the country, local charities were overwhelmed, and elderly Americans had no reliable safety net. Roosevelt pushed for a federal insurance program that would let workers earn future benefits through payroll contributions rather than depend on welfare. Congress delivered the Social Security Act, codified at 42 U.S.C. Chapter 7, creating the legal foundation for a national old-age insurance system.1Office of the Law Revision Counsel. 42 USC Chapter 7 – Social Security
The original law covered roughly half the American workforce. Agricultural workers, domestic laborers, and the self-employed were all excluded, a decision that disproportionately left out Black and Hispanic workers. Those exclusions would take decades to unwind. By tying benefits to employment history and payroll tax contributions, the law was designed to operate as an earned benefit rather than a government handout.
The First Social Security Numbers, 1936
Before the government could collect taxes or pay benefits, it needed a way to track every worker’s earnings over an entire career. In mid-November 1936, the federal government began issuing Social Security Numbers. Because the Social Security Board had no field offices yet, it contracted with the U.S. Postal Service to hand out applications through roughly 45,000 local post offices.2Social Security Administration. Social Security History – The First Social Security Number and the Lowest Number Around 30 million applications were processed between November 1936 and June 1937.3Social Security Administration. Social Security Number Chronology
Each nine-digit number created a permanent earnings record the government could use to calculate the correct benefit when a worker eventually retired. Without that infrastructure, managing millions of individual accounts would have been impossible.
First Taxes in 1937, First Monthly Check in 1940
Payroll tax collection officially began in 1937 at a combined rate of 2 percent: 1 percent from workers and 1 percent from employers, applied to the first $3,000 in annual earnings.4Social Security Administration. FICA and SECA Tax Rates
Between 1937 and 1939, the program issued one-time lump-sum payments to workers who retired or died before qualifying for a monthly pension. These were essentially refunds of taxes paid. The average lump-sum payment in December 1939 was $96.93, and the maximum possible was $315.5Social Security Administration. The History and Development of the Lump Sum Death Benefit
Regular monthly checks did not start until January 1940. Ida May Fuller of Ludlow, Vermont, received the first monthly retirement check on January 31, 1940, in the amount of $22.54.6Social Security Administration. Details of Ida May Fuller’s Payroll Tax Contributions That single check proved the system worked and set the template for millions of payments to come.
Family Benefits Added in 1939
Before monthly checks even went out, Congress reshaped the program. The 1939 amendments turned Social Security from a retirement benefit for individual workers into a family-based economic security system.7Social Security Administration. 1939 Amendments Two new categories of benefits were added: payments to the spouse and minor children of a retired worker, and survivor benefits paid to the family when a covered worker died.8Social Security Administration. History – 1939 Amendments
Aged wives received a supplementary benefit equal to half the primary worker’s benefit. Widows aged 65 or older and dependent children under 16 also became eligible. The survivor benefit, in particular, filled a gap that had left families destitute when a breadwinner died young.
Disability Insurance in 1956
For two decades, Social Security offered nothing to workers who became too disabled to continue working before retirement age. That changed on August 1, 1956, when President Eisenhower signed the Social Security Amendments of 1956, creating Disability Insurance (SSDI).9Social Security Administration. Social Security Amendments of 1956 The original coverage was narrow: only permanently and totally disabled workers between ages 50 and 65 who met strict work-history requirements could qualify, and there was a six-month waiting period before benefits began.10govinfo. 70 Stat 807 – An Act to Amend Title II of the Social Security Act
Over time, Congress loosened those restrictions. The age-50 floor was eliminated in 1960, and dependents of disabled workers became eligible for benefits as well.
Medicare and SSI in the 1960s and 1970s
On July 30, 1965, President Lyndon B. Johnson signed the Social Security Amendments of 1965, creating Medicare and Medicaid.11National Archives. Medicare and Medicaid Act (1965) Medicare provided health insurance for Americans 65 and older, filling a gap that private insurers had largely refused to cover. It was arguably the biggest expansion of the Social Security system since its creation.
Congress kept building on the system in the 1970s. The Social Security Amendments of 1972 federalized a patchwork of state welfare programs for the aged, blind, and disabled into a single program called Supplemental Security Income (SSI). Unlike regular Social Security, SSI is funded through general tax revenue rather than payroll taxes and is means-tested. SSI payments began in January 1974.12Social Security Administration. Historical Background and Development – Social Security History
Automatic COLAs Starting 1975
For its first four decades, Social Security benefits only increased when Congress passed a specific law raising them. That meant retirees’ purchasing power eroded with inflation until legislators got around to acting. The 1972 amendments fixed this by creating automatic cost-of-living adjustments (COLAs), with the first automatic increase taking effect in July 1975.13Congress.gov. Social Security: Cost-of-Living Adjustments
COLAs are tied to the Consumer Price Index, so benefits rise or stay flat each year based on measured inflation. The 2026 COLA is 2.8 percent, which took effect with benefits payable in January 2026.14Social Security Administration. Cost-of-Living Adjustment (COLA) Information Some years the adjustment is dramatic; the 2023 COLA was 8.7 percent. Other years it rounds to zero.
The 1983 Reforms and a Higher Retirement Age
By the early 1980s, Social Security was on the verge of running out of money. A bipartisan commission led to the Social Security Amendments of 1983, which made several changes to shore up the program’s finances. The most consequential was a gradual increase in the full retirement age from 65 to 67.15Social Security Administration. Legislative History – 1983 Amendments
The increase is phased in based on birth year. If you were born between 1943 and 1954, your full retirement age is 66. For birth years 1955 through 1959, it rises in two-month increments. Anyone born in 1960 or later faces a full retirement age of 67.16Social Security Administration. Retirement Benefits You can still claim benefits as early as 62, but doing so means a permanently reduced monthly check. Waiting past full retirement age increases your benefit up to age 70.
Where the Program Stands Now
Social Security is funded primarily by payroll taxes collected from current workers. When collections exceed benefit payments, the surplus goes into trust funds holding special-issue Treasury securities. According to the 2025 Trustees Report, the combined Old-Age and Survivors Insurance and Disability Insurance trust funds can pay 100 percent of scheduled benefits until 2034. After that, ongoing payroll tax revenue would still cover roughly 81 percent of scheduled benefits.17Social Security Administration. Trustees Report Summary
The Disability Insurance trust fund alone is in much stronger shape, projected to pay full benefits through at least 2099. Depletion does not mean the program disappears; it means Congress would need to act to avoid an automatic benefit cut of about 19 percent. For someone retiring at full retirement age in 2026, the maximum monthly benefit is $4,152, the current high-water mark of a system that began with a $22.54 check in 1940.