Social Security was established on August 14, 1935, when President Franklin D. Roosevelt signed the Social Security Act into law as part of the New Deal.1Office of the Law Revision Counsel. 42 USC Chapter 7 – Social Security It was the first permanent federal safety net for retired workers, the unemployed, and vulnerable families, and it has been reshaped many times in the ninety years since.
Why 1935
The Great Depression made the problem impossible to ignore. Savings had been wiped out, banks had failed, and poverty among older Americans was severe because no national retirement system existed. Families that had traditionally supported aging relatives couldn’t do it when nobody had money. State relief programs were underfunded and inconsistent, and the crisis was plainly too big for any single state to handle.
Roosevelt moved in June 1934, issuing Executive Order 6757 to create the Committee on Economic Security and study the problem.2The American Presidency Project. Executive Order 6757 – Establishing the Committee on Economic Security and the Advisory Council on Economic Security The committee’s work, led by Secretary of Labor Frances Perkins, became the blueprint for the legislation Roosevelt signed the following year.
What the Original 1935 Act Covered
The law was organized into numbered titles, each aimed at a different vulnerability.3Social Security Administration. Social Security Act of 1935
- Title I provided federal grants to states for immediate cash relief to elderly people already living in poverty.
- Title II created the contributory old-age benefits program, funded through payroll taxes and tied to a worker’s earnings. This is the program most people mean when they say “Social Security.”
- Titles III and IX set up the joint federal-state unemployment compensation system.
- Title IV created Aid to Dependent Children for families with children who had lost a parent or whose parent couldn’t work.
- Titles V and VI funded maternal and child health services, child welfare, and broader public health work.
Coverage was narrower than people often assume. The original act reached only workers in commerce and industry. Agricultural workers, domestic workers, and the self-employed were excluded, which left roughly half the American workforce outside the system. Many of those excluded groups were disproportionately Black and immigrant workers. Coverage was gradually expanded in later decades.
When Benefits Actually Started
Signing the law and paying benefits were two different things. The Social Security Board began registering workers in late 1936, using roughly 45,000 local post offices to distribute applications.4Social Security Administration. The First Social Security Number and the Lowest Number Each worker received a Social Security Number linked to a permanent earnings record kept in Baltimore.5Social Security Administration. Social Security History – Social Security Numbers
Payroll taxes began on January 1, 1937, at 1% each on employers and employees.6Social Security Administration. Social Security Tax Rates From 1937 through 1939, the only benefits paid were lump sums: one at retirement, one at death.7Social Security Administration. Social Security Online History Pages The first monthly retirement check went out on January 31, 1940, to Ida May Fuller of Ludlow, Vermont, for $22.54.8Social Security Administration. Details of Ida May Fuller’s Payroll Tax Contributions
How the Program Has Changed Since 1935
The 1935 law was a starting point. Congress has rebuilt and expanded Social Security many times since.
1939: Survivors and Family Benefits
The original act paid the retired worker and nobody else. The 1939 Amendments added benefits for a retired worker’s spouse and minor children, and survivors benefits for the family of a worker who died before retirement.9Social Security Administration. Legislative History – 1939 Amendments The amendments also raised benefit amounts and moved the start of monthly payments up from 1942 to 1940. Social Security shifted from an individual retirement program into family protection.
1956: Disability Insurance
President Eisenhower signed the Social Security Amendments of 1956 on August 1, 1956, creating disability insurance for workers between 50 and 65 who were permanently and totally disabled.10Social Security Administration. Social Security Amendments of 1956 – A Summary and Legislative History Monthly disability payments began in July 1957, funded through a separate trust fund. The age restriction was later removed, opening coverage to disabled workers of any age.
1965: Medicare
President Lyndon B. Johnson signed the Social Security Amendments of 1965 on July 30, 1965, creating Medicare hospital insurance for Americans 65 and older and Medicaid for low-income individuals.11National Archives. Medicare and Medicaid Act (1965) Medicare was built directly on the Social Security framework: qualifying for retirement benefits meant qualifying for hospital coverage.
1972: SSI and Automatic COLAs
Congress created Supplemental Security Income in 1972, a federally administered cash program for low-income elderly, blind, and disabled individuals.12U.S. Department of Health and Human Services. Supplemental Security Income (SSI) Program – Overview SSI is means-tested and paid from general revenue rather than payroll taxes. The same 1972 law established automatic annual cost-of-living adjustments, which began in 1975. Before then, Congress had to pass a new law each time it wanted to raise benefits to keep up with inflation.
1983: The Greenspan Reforms
By the early 1980s the system was running out of money. The National Commission on Social Security Reform, chaired by Alan Greenspan, found a financing crisis in both the short and long term.13Social Security Administration. 1983 Greenspan Commission on Social Security Reform The 1983 Amendments raised the full retirement age gradually from 65 to 67, started taxing benefits for higher-income recipients, and adjusted the tax rate schedule. The retirement-age structure created by those amendments is still in effect.
Where Things Stand Now
The 1% payroll tax of 1937 has grown considerably. In 2026, you and your employer each pay 6.2% of wages toward Social Security, for a combined 12.4%. If you’re self-employed, you pay the full 12.4% yourself.14Social Security Administration. Contribution and Benefit Base You and your employer each pay another 1.45% for Medicare, with no earnings cap. Social Security tax applies only to earnings up to $184,500 in 2026; anything above that is exempt from Social Security tax, though Medicare tax keeps going.15Social Security Administration. What Is the Current Maximum Amount of Taxable Earnings for Social Security?
To qualify for retirement benefits, you need 40 work credits, or roughly ten years of employment. In 2026 you earn one credit for each $1,890 in earnings, up to four credits per year.16Social Security Administration. How You Earn Credits Full retirement age for anyone born in 1960 or later is 67.17Social Security Administration. Normal Retirement Age You can claim as early as 62, but your monthly benefit is permanently reduced by about 30% compared to what you would get at 67.18Social Security Administration. Retirement Age and Benefit Reduction Delaying past 67 increases your benefit until age 70.