Social Security 101

02/15/2022 Written by: Jayne Deutmeyer, AIF®

The historical Social Security Act was signed into law by President Franklin D. Roosevelt on August 14, 1935. In January 1937, the government started collecting taxes and the first one-time, lump-sum payments were made. It wasn’t until 1940 that retirees started receiving regular monthly payments.

Initially, only the primary worker received benefits. A 1939 law added survivor’s benefits and benefits for the retiree’s spouse and children. Finally, in 1956, disability benefits were added.

Ida Fuller was the first recipient of the monthly social Security Benefits in 1940, and so much as changed since then!

As recently as 2015, the U.S. Supreme Court issued a decision in Obergefell v. Hodges, holding that same sex couples have a constitutional right to marry in all states and have their marriage recognized by other states. This decision made it possible for more same-sex couples and their families to benefit from Social Security programs.

Social Security has supported many individuals and families with monthly income, including a small death benefit of $255.00 (if certain requirements are met).

How does Social Security work?

  • One becomes eligible for benefits by working at a Social Security covered job to earn 40 credits.
  • Your highest 35 years of earnings are tallied. If you work more than 35 years, the highest 35 years earnings will count. If you worked fewer than 35 years, the years with no earnings will count as zeroes.
  • Your benefit will be 70-75% of your Primary Insurance Amount (PIA) amount depending on your year of birth.
  • You can apply for benefits as early as 62. If you elect benefits at age 62, you will receive lower benefits for life.
  • Full Retirement Benefits (FRA) is determined by your year of birth, generally between 66 and 67. FRA is often misunderstood by individuals as it is often thought it is the same as Medicare eligibility. By waiting until FRA, you can avoid any early reductions in benefits. For those that can wait to draw benefits until age 70, the SSA benefit will increase by 8% per year, pro-rated monthly.
  • Each October, any increase in benefits due to an increase in cost of living are determined by the Consumer Price Index and is announced. Those that draw benefits will see an increase in their January retirement check.

Your election for Social Security Retirement Benefits requires thoughtful consideration and should not be taken lightly. There are also special rules that apply to spousal benefits, divorced spouses, survivor benefits, taxability of benefits, and how working affects your Social Security benefits.

More information can be found online at or by calling 800-772-1213. In person meetings with SSA can be hard to schedule and often long wait times are necessary. 

Please consult legal or tax professionals for specific information regarding your individual situation. 

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