Social Security (United States)

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 Social programs
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Private sector workers to social benefits recipient
   Private sector workers
  Disability recipients
  Survivors benefits
  Retired Social Security

In the United States, Social Security is the commonly used term for the federal Old-

Age, Survivors, and Disability Insurance (OASDI) program and is administered by
the Social Security Administration.[1] The original Social Security Act was enacted in
1935,[2] and the current version of the Act, as amended,[3] encompasses several
social welfare and social insurance programs.
The average monthly Social Security benefit for December 2019 was $1,382. [4] The total
cost of the Social Security program for the year 2019 was $1.059 trillion or about 5
percent of U.S. GDP for 2019.[5]
Social Security is funded primarily through payroll taxes called Federal Insurance
Contributions Act tax (FICA) or Self Employed Contributions Act Tax (SECA). Wage and
salary earnings in covered employment, up to an amount specifically determined by law
(see tax rate table below), are subject to the Social Security payroll tax. Wage and
salary earnings above this amount are not taxed. In 2021, the maximum amount of
taxable earnings is $142,800.[6]
Social Security is nearly universal, with 94 percent of individuals in paid employment in
the United States working in covered employment. [7] However, about 6.6 million state
and local government workers in the United States, or 28 percent of all state and local
workers, are not covered by Social Security but rather pension plans operated at the
state or local level.
Social Security payroll taxes are collected by the Internal Revenue Service (IRS) and
are formally entrusted to the Federal Old-Age and Survivors Insurance (OASI) Trust
Fund and the Federal Disability Insurance (DI) Trust Fund, the two Social Security Trust
Funds.[8][9] Social Security revenues exceeded expenditures between 1983 and
2009[10] which increased trust fund balances. The retirement of the large baby-boom
generation, however, will lower balances. Without legislative changes, trust fund
reserves are projected to be depleted in the years 2034 and 2065 for the OASI and DI
funds, respectively.[5] Should depletion occur, incoming payroll tax and other revenue
would only be sufficient to pay 76 percent of OASI benefits starting in 2035 and 92
percent of DI benefits starting in 2065.
With few exceptions, all legal residents working in the United States now have an
individual Social Security Number.
 Contents

History[edit]
Main article: History of Social Security in the United States
hideHistorical Social Security Tax Rates
Maximum Salary FICA or SECA taxes paid on

Maximum OASDI Medicare Maximum OASDI Medicare

Year Year
Earnings Tax rate Tax Rate Earnings Tax rate Tax Rate
taxed taxed

1937 3,000 2% — 1978 17,700 10.1% 2.0%

1938 3,000 2% — 1979 22,900 10.16% 2.1%

1939 3,000 2% — 1980 25,900 10.16% 2.1%

1940 3,000 2% — 1981 29,700 10.7% 2.6%

1941 3,000 2% — 1982 32,400 10.8% 2.6%

1942 3,000 2% — 1983 35,700 10.8% 2.6%

1943 3,000 2% — 1984 37,800 11.4% 2.6%

1944 3,000 2% — 1985 39,600 11.4% 2.7%

1945 3,000 2% — 1986 42,000 11.4% 2.9%

1946 3,000 2% — 1987 43,800 11.4% 2.9%

1947 3,000 2% — 1988 45,000 12.12% 2.9%

1948 3,000 2% — 1989 48,000 12.12% 2.9%

1949 3,000 2% — 1990 51,300 12.4% 2.9%

1950 3,000 3% — 1991 53,400 12.4% 2.9%

1951 3,600 3% — 1992 55,500 12.4% 2.9%

1952 3,600 3% — 1993 57,600 12.4% 2.9%

1953 3,600 3% — 1994 60,600 12.4% 2.9%

1954 3,600 4% — 1995 61,200 12.4% 2.9%

1955 4,200 4% — 1996 62,700 12.4% 2.9%

1956 4,200 4% — 1997 65,400 12.4% 2.9%

 1957 4,200 4.5% — 1998 68,400 12.4% 2.9%

1958 4,200 4.5% — 1999 72,600 12.4% 2.9%

1959 4,800 5% — 2000 76,200 12.4% 2.9%

1960 4,800 6% — 2001 80,400 12.4% 2.9%

1961 4,800 6% — 2002 84,900 12.4% 2.9%

1962 4,800 6.25% — 2003 87,000 12.4% 2.9%

1963 4,800 7.25% — 2004 87,900 12.4% 2.9%

1964 4,800 7.25% — 2005 90,000 12.4% 2.9%

1965 4,800 7.25% — 2006 94,200 12.4% 2.9%

1966 6,600 7.7% 0.7% 2007 97,500 12.4% 2.9%

1967 6,600 7.8% 1.0% 2008 102,000 12.4% 2.9%

1968 7,800 7.6% 1.2% 2009 106,800 12.4% 2.9%

1969 7,800 8.4% 1.2% 2010 106,800 12.4% 2.9%

1970 7,800 8.4% 1.2% 2011 106,800 10.4% 2.9%

1971 7,800 9.2% 1.2% 2012 110,100 10.4% 2.9%

1972 9,000 9.2% 1.2% 2013 113,700 12.4% 2.9%

1973 10,800 9.7% 2.0% 2014 117,000 12.4% 2.9%

1974 13,200 9.9% 1.8% 2015 118,500 12.4% 2.9%

1975 14,100 9.9% 1.8% 2016 118,500 12.4% 2.9%

1976 15,300 9.9% 1.8% 2017 127,200 12.4% 2.9%

1977 16,500 9.9% 1.8% 2018 128,400 12.4% 2.9%

Notes:
Tax rate is the sum of the OASDI and Medicare rate for employers and workers.
In 2011 and 2012, the OASDI tax rate on workers was set temporarily to 4.2%
while the employers OASDI rate remained at 6.2% giving 10.4% total rate.
Medicare taxes of 2.9% now (2013) have no taxable income ceiling.
Sources: Social Security Administration[11][12]

Social Security timeline[13]

 1935 The 37-page Social Security Act signed August 14 by President

Franklin D. Roosevelt. The legislation included Unemployment Insurance, Aid
to Dependent Children, Old Age Insurance (OAI), and Old Age Assistance
(OAA). The old age insurance program gradually developed into the Old Age
Survivors and Disability Insurance program, which is what Americans
typically associate "Social Security" with. [14]
 1936 The new Social Security Board contracts the Post Office Department in
late November to distribute and collect applications.
 1937 More than twenty million Social Security Cards issued. Ernest
Ackerman receives first lump-sum payout (17 cents) in January. [15]
 1939 Two new categories of beneficiaries added: spouse and minor children
of a retired worker
 1940 First monthly benefit check issued to Ida May Fuller for $22.54
 1950 Benefits increased and cost of living adjustments (COLAs) made at
irregular intervals – 77% COLA in 1950
 1954 Disability program added to Social Security
 1960 Flemming v. Nestor. Landmark U.S. Supreme Court ruling that gave
Congress the power to amend and revise the schedule of benefits. The Court
also ruled that recipients have no contractual right to receive payments.
 1961 Early retirement age lowered to age 62 at reduced benefits
 1965 Medicare health care benefits added to Social security – twenty million
joined in three years
 1966 Medicare tax of 0.7% added to pay for increased Medicare expenses
 1972 Supplemental Security Income (SSI) program federalized and assigned
to Social Security Administration
 1975 Automatic cost of living adjustments (COLAs) mandated
 1977 COLA adjustments brought back to "sustainable" levels
 1980 Amendments are made in disability program to help solve some
problems of fraud
 1983 Taxation of Social Security benefits introduced, new federal hires
required to be under Social Security, retirement age increased for younger
workers to 66 and 67 years