Social Security and Retirement
A Brief History of Social Security
August 14, 1935, at 3:30 p.m
The Beginning of the Social Security Administration
The Social Security Administration (SSA) began life as the Social Security Board (SSB). The SSB was created at the moment President Roosevelt inked his signature on the Social Security Act. The SSB was an entirely new entity with no staff, no facilities, and no budget. The initial personnel was donated from existing agencies, and a temporary budget was obtained from Harry Hopkins and the Federal Emergency Relief Administration. Frances Perkins, Secretary of Labor, offered one of her Assistant Secretaries, Arthur Altmeyer, to be an initial Board member, and she even gave her high-backed red-leather executive chair to Altmeyer since the SSB had no furniture. The Board itself consisted of three presidentially appointed executives and such staff as they needed to hire.
July 1, 1939
Federal Security Agency Created
The Social Security Board lost its independent agency status when the new sub-cabinet level Federal Security Agency was created. The FSA encompassed the SSB, the Public Health Service, the Office of Education, the Civilian Conservation Corp., and the U.S. Employment Service.
July 16, 1946
Renaming of the SSB and First Commissioner
The SSB was renamed the Social Security Administration under the President's Reorganization Plan of 1946. Arthur Altmeyer, who had been chairman of the Board of the SSB, became SSA's first Commissioner.
April 11, 1953
HEW Created
President Eisenhower abolished the FSA and created a new Department of Health, Education and Welfare (HEW). SSA was made part of this new cabinet agency.
May 4, 1980
HEW Replaced by Department of Health & Human Services
The HEW was replaced by the Department of Health & Human Services. SSA was a major part of HHS until legislation signed by President Clinton on August 15, 1994, returned SSA to its original status as an independent agency effective March 31, 1995.
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Social Security: More Than Retirement
Many people think of Social Security as just a retirement program. Although it is true that most of the people receiving Social Security receive retirement benefits, many others get Social Security benefits because they are:
Disabled
A spouse or child of someone who gets Social Security
A spouse or child of a worker who died
A dependent parent of a worker who died
Each type of benefit has different requirements.
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Social Security was never meant to be the only source of income for people when they retire. 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. To have a comfortable retirement, Americans need much more than just Social Security. They also need private pensions, savings, and investments.
Where Your Social Security Tax Dollars Go
The money you pay in taxes is not held in a personal account for you to use when you get benefits. Your taxes are being used right now to pay people who now are getting benefits. Any unused money goes to the Social Security trust funds, not a personal account with your name on it.
When you work, 85 cents of every Social Security tax dollar you pay goes to a trust fund that pays monthly benefits to current retirees and their families and to surviving spouses and children of workers who have died. The other 15 cents goes to a trust fund that pays benefits to people with disabilities and their families.
From these trust funds, Social Security also pays the costs of managing the Social Security programs. The Social Security Administration is one of the most efficient agencies in the federal government, and the SSA is working to make it better every day. Of each Social Security tax dollar you pay, the SSA spends less than one penny to manage the program.1
Social Security helps a variety of people from retirees to disabled to relatives of those on Social Security.