Social Security began in 1935 and sent its first check in 1940

President Franklin D. Roosevelt signed the Social Security Act into law on August 14, 1935, during the Great Depression. The program was designed to provide income to retired workers, unemployed people, and people with disabilities. The first monthly benefit check went to a retired worker named Ida May Fuller on January 31, 1940 — she received $22.54.

The program started collecting payroll taxes from workers and employers in 1937, but did not begin paying benefits until 1940. This three-year gap allowed the program to build a reserve fund before payments started. The original law covered only workers in commerce and industry, excluding farm workers, domestic workers, and the self-employed — these groups were added later through amendments.

Key Takeaways

  • Social Security was created by federal law in 1935 and began collecting taxes in 1937, but the first benefit payment did not occur until January 1940.
  • The program originally covered only certain workers in commerce and industry, with farm workers and domestic workers added through later amendments.
  • Ida May Fuller was the first person to receive a monthly Social Security benefit check, receiving $22.54 in January 1940.
  • The program was built as an insurance system where workers and employers both pay into a fund that supports current retirees and people with disabilities.

How the program expanded after 1935

The original Social Security Act covered only retirement benefits for workers age 65 and older. In 1939, Congress amended the law to add survivor benefits — payments to the widow and children of a worker who died. This change happened before the first retirement check was even sent out.

Disability benefits were added much later, in 1956 for workers age 50 and older, and in 1960 the age restriction was removed so workers of any age could receive disability payments. Medicare, the health insurance program for people 65 and older, was created in 1965 as a companion program to Social Security. Supplemental Security Income (SSI), which provides cash to low-income elderly, blind, and disabled people, was added in 1972.

Who paid into Social Security from the start

When the program began collecting taxes in 1937, the payroll tax rate was 1 percent on both the worker and the employer — meaning a worker paid 1 percent of wages and the employer paid 1 percent. The tax applied only to wages up to $3,000 per year. Self-employed people did not pay into the system initially.

The tax rate and the wage cap have changed many times since then. By 1960, the rate had risen to 3 percent on each side. Today the rate is 12.4 percent total (6.2 percent from the worker, 6.2 percent from the employer), and self-employed people pay the full 12.4 percent themselves. The wage cap changes every year based on average wage growth in the economy.

Why Social Security was created

The Great Depression left millions of elderly people without income or savings. Before Social Security, retirement meant depending on family members, charity, or local poorhouses. Some states had their own old-age pension programs, but they were small and inconsistent. Roosevelt's administration designed Social Security as a national program to prevent destitution in old age.

The program was framed as insurance, not welfare. Workers paid into it during their working years and received benefits later based on their contributions. This framing was deliberate — it gave the program political durability because people saw it as something they had earned, not a handout. The insurance model also meant the program could be funded through payroll taxes rather than general tax revenue.

How Social Security worked in its first years

The first Social Security checks were small. Ida May Fuller, the first beneficiary, had paid only $24.75 into the system over three years of work before she retired. Her first check of $22.54 was nearly her entire contribution back. The average monthly benefit in 1940 was about $23 — roughly equivalent to $450 in 2024 dollars.

may be able to access in the early years required that a worker had reached age 65 and had worked in a covered job for at least five years. The program kept detailed records of earnings and contributions. Married women could receive benefits based on their husband's record, a provision that reflected the employment patterns of the 1930s and 1940s when most married women did not work outside the home.

Changes to Social Security between 1935 and today

The full retirement age — the age at which a worker can receive 100 percent of their benefit — was originally 65. In 1983, Congress passed a major amendment that gradually raised the full retirement age to 67, phased in over time. Workers born in 1960 or later have a full retirement age of 67. The law also made up to 85 percent of benefits subject to income tax for higher-income beneficiaries, another 1983 change.

The program has also expanded its reach. In 1972, the law was changed to automatically adjust benefits each year for inflation — this is called the Cost of Living Adjustment (COLA). Before that, Congress had to pass a new law each time benefits needed to increase. The program now covers over 67 million people, including retirees, disabled workers, survivors of deceased workers, and their family members.

How the trust fund has changed since 1935

Social Security operates through two trust funds: the Old-Age and Survivors Insurance (OASI) fund and the Disability Insurance (DI) fund. In the early decades, the program collected more in taxes than it paid out, building a large reserve. This reserve was meant to smooth out years when benefits exceeded income.

Starting in 2021, the program began paying out more in benefits than it collected in payroll taxes. The reserve is being drawn down to cover the difference. The trustees of Social Security publish annual reports on the financial status of the trust funds. These reports project when the reserves will be depleted if no changes are made to tax rates, benefit levels, or may be able to access rules.

Frequently Asked Questions

Did Social Security exist before 1935?

No. Before 1935, there was no federal Social Security program. Some states had old-age pension programs, and some employers offered pensions, but there was no national system. The 1935 law created the first federal program of its kind in the United States.

Why did it take until 1940 to send the first check?

The program needed time to set up the administrative systems to track workers' earnings and contributions. It also wanted to build a reserve fund before paying benefits. The three-year gap between the start of tax collection (1937) and the first benefit payment (1940) allowed the program to prepare.

Could women receive Social Security benefits in 1940?

Yes, but usually as wives or widows of workers rather than based on their own work record. Married women could receive benefits at age 65 based on their husband's earnings. Unmarried women who worked in covered jobs could receive benefits based on their own contributions, just as men could.

Has the Social Security age always been 65?

Yes, the original law set 65 as the retirement age. However, the full retirement age — the age at which you receive your complete benefit — was raised to 67 starting in 1983, phased in gradually for workers born after 1938. You can still claim benefits as early as age 62, but the amount will be permanently reduced.