Fascinating Facts People Don't Know About Social Security

The OASDI program provides monthly benefits to qualified retired and disabled workers and their dependents and to survivors of insured workers. Eligibility and benefit amounts are determined by the worker’s contributions to Social Security over the course of employment. There is no means test to qualify for benefits, although there is a limit on additional income earned from working while collecting Social Security that applies to those under the full retirement age.

The Social Security Administration was created in 1935 as the “Social Security Board,” assuming its present name in 1946. The preamble to the Social Security Act of 1935 describes it as “An act to provide for the general welfare by establishing a system of Federal old-age benefits, and by enabling the several States to make more adequate provision for aged persons, blind persons, dependent and crippled children, maternal and child welfare, public health, and the administration of their unemployment compensation laws; to establish a Social Security Board; to raise revenue; and for other purposes”

In both the preamble cited above and Title X of the Social Security Act of 1935, the blind are specifically included. As of 2022, there are currently 12 million Americans aged 40 and above suffering from vision impairment, and roughly a million of those are blind. If a worker’s earnings were lower for certain years because of blindness, those years can be excluded from Social Security calculations, and the amount of benefits the blind are eligible for will increase.

Each year the Trustees of the Social Security and Medicare trust funds report on the current and projected financial status of each program. As it stands now, Social Security and Medicare both face long-term financing shortfalls under currently scheduled benefits and financing. Costs of both programs will grow faster than gross domestic product (GDP) through the mid-2030s primarily due to the rapid aging of the U.S. population.

The assumptions in the most recent Trustees’ report were determined in mid-February 2022, and developments since then have added to the uncertainty regarding the path of the COVID-19 pandemic and the economy in the near term. As a result, the Trustees project that the Social Security trust fund will be able to pay scheduled benefits on a timely basis only until 2034 (one year later than reported last year). At that time, the fund’s reserves will become depleted, and continuing tax income will be sufficient to pay only 77% of scheduled benefits.

According to the SSA, individuals can start receiving Social Security retirement benefits as early as age 62. However, individuals are entitled to full benefits when they reach their full retirement age. If there is a delay in taking benefits from the full retirement age up to age 70, the benefit amount will increase. Also, if individuals start receiving benefits early, these benefits are reduced a small percentage for each month before the full retirement age.

In the late 1970’s, the United States established a network of bilateral Social Security agreements that coordinate the U.S. Social Security program with the comparable programs of other countries. These International Social Security agreements, often called “totalization agreements,” have two main purposes. First, they eliminate dual Social Security taxation, the situation that occurs when a worker from one country works in another country and is required to pay Social Security taxes to both countries on the same earnings. Second, the agreements help fill gaps in benefit protection for workers who have divided their careers between the United States and another country. These agreements to coordinate Social Security protection across national boundaries have been common in Western Europe for decades.

The Ways & Means Committee Report on the Social Security Act was introduced in the House on April 4, 1935, and debate began on April 11th. After several days of debate, the bill was passed in the House on April 19, 1935 by a vote of 372 yeas, 33 nays, 2 present, and 25 not voting. The bill was reported out by the Senate Finance Committee on May 13, 1935 and introduced in the Senate on June 12th. The debate there lasted until June 19th, when the Social Security Act was passed by a vote of 77 yeas, 6 nays, and 12 not voting.

In 2020, the most recent year for which data is available, 69.8 million people received benefits from programs administered by the SSA. That same year, 5.8 million people were newly awarded Social Security benefits. Also, 55% of adult Social Security beneficiaries in 2020 were women.

The OASDI program limits the amount of earnings subject to taxation for a given year. The same annual limit also applies when those earnings are used in a benefit computation. This limit changes each year as the national average wage index rises or falls. The SSA calls this annual limit the contribution and benefit base, also commonly referred to as the taxable maximum. For earnings in 2022, this base is $147,000.

As of 2018, about 60,000 people were employed by SSA. The agency offers its services to the public through 1,200 field offices, a website, and a national toll-free number. Note that these field offices served 43 million individuals in 2019. In addition the agency also includes 10 regional offices, 8 processing centers, and 37 teleservice centers.