Social Security 82 Years Later: From the first person to get a Social Security number to how benefits are calculated

October 11, 2018Financial Advisor Scottsdale AzRetirement Planning Scottsdale

https://retirementplanningscottsdale.com/2018/10/11/social-security-82-years-later-from-the-first-person-to-get-a-social-security-number-to-how-benefits-are-calculated/ by Gary Strauss, AARP, August 14, 2017

The Social Security program has turned 82 years old this year.

Nearly 61.5 million U.S. residents now collect Social Security benefits, which President Franklin D. Roosevelt signed on Aug. 14, 1935. While the majority of today’s beneficiaries are retirees 62 and older, about 4 million children under the age of 18 receive benefits as the offspring of deceased, disabled or retired workers.

In honor of its 82nd anniversary, here are 10 interesting facts about Social Security.

When Social Security legislation was approved in 1935, the minimum monthly benefit was $10 and the maximum was $85. Average monthly benefit check in 2017: $1,323, or about $15,881 a year, For someone reaching the full retirement age of 66 this year, the maximum benefit is $2,687 a month, or $32,244 annually. Claiming at age 70? The maximum monthly benefit is $3,538, or $42,456 a year.
Annual cost-of-living adjustments (COLAs), first initiated in 1972, are based on the Consumer Price Index for the July/August/September quarter of the previous year. In 2018, the COLA is expected to rise about 2 percent — the largest increase since 2012.
While Social Security is designed to replace about 38 percent of the average American’s preretirement income, compared with other countries, the U.S. lags badly. The Netherlands, Poland and Slovenia are among 29 countries that are more generous to retirees.
The first Social Security number — 055-09-0001— was assigned to John David Sweeney, who died of a heart attack in 1974. At 61, he was too young to collect any Social Security retirement benefits. His widow, however, received benefits based on her work until her death in 1982.
Ida May Fuller, the first Social Security check beneficiary, began receiving $22.54 a month in January 1940. By the time of her death at age 100 in 1975, the former Vermont schoolteacher and secretary had collected more than $22,000.
In the 1930s and ’40s, more than 40,000 people claimed 078-05-1120 as their number — the one that manufacturer E.H. Ferree used for sample cards in his line of wallets. That number belonged to company secretary Hilda Schrader Whitcher, who said she couldn’t understand why people started using it. Whitcher was eventually issued a new number, but only after being questioned by the FBI.
More than 454 million numbers have been issued, with about 5.5 million new numbers assigned every year. Before they were randomized in 2011, the first three digits were numbers assigned geographically, with the lowest numbers in the Northeast and highest in the Northwest.
Have a problem with your nine-digit Social Security number? You can request a new number if you’re a victim of identity theft, if your life is endangered or if you have religious or cultural objections to certain numbers.
For workers who earned average wages and retired at 65 in 1980, it took 2.8 years of benefits payments to recover the value of their payroll taxes. For workers who retired in 2003, it will take 17.4 years. And for workers who retire in 2020, it will take 21.6 years.
Your benefits are based on the income earned in your 35 highest-earning working years. (You need to accumulate at least 40 work credits to qualify for benefits, which normally takes 10 years.) That said, almost 25 percent of future retirees who expect to receive Social Security payments don’t have a clue about how much they’ll receive. Need help? Check out AARP’s Benefits Calculator.

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