With Social Security coming under Elon Musk and DOGE’s gun, there aren’t many people who aren’t concerned for one reason or another. Most obvious are the 71.6 million seniors collecting benefits (Source:www.ssa.gov), two-thirds of them depending on it for sheer subsistence. Younger generations currently paying in are worried if it will be there at all when their time comes. Contractors wonder if they’ll still have a client left. SSA employees may be job hunting by next week.
Given the intensity of the issue, not to mention the impact and gravitas, perhaps it would help us to look at four historic facts and four factoids – a somewhat lighter-weight take on it all – which I think still keeps us aware of how serious this issue is.
Historic fact #1: On August 14, 1935, President Franklin Delano Roosevelt signed Social Security into law. In its original form, it was meant to implement “social insurance” during the Great Depression and to fight the dangers of poverty that affected more than half the seniors in America. It provided benefits to retirees and the unemployed, and a lump-sum benefit at death.
Interesting factoid #1: The first Social Security payment went to motorman Ernest Ackerman from Cleveland, who retired one day after FDR signed the bill. Five cents were withheld from his last paycheck and he received a lump-sum payout of seventeen cents.
Historic fact #2: In 1930, life expectancy in America was 58 years for males and 62 years for females. One of the underlying actuarial assumptions of Social Security when it was enacted, apparently, was that the government wouldn’t be paying a whole lot of money to a whole lot of retirees.
Interesting factoid #2: The first monthly Social Security payment was issued on January 31, 1940 to Ida May Fuller of Vermont, who had paid $24.75 into the system in 1937, 1938, and 1939. Her first check, at sixty-five years and a half, was for $22.54, and with her second check she already had received more than she had contributed. She wound up living to 100 – incredibly rare for someone born in 1874 – and collected a total of $22,888.92, a payback of $925 on the dollar. (Forgive my frivolity, but with that type of return on what I’ve paid in, I think I’d be sitting on something like $4 billion. Could be more, but I don’t comprehend numbers like that.)
Historic fact #3: In 1930, only 50 percent of men and 60 percent of women were expected to live to 65.
Interesting factoid #3: The average remaining life expectancy for those who reached their 65th birthdays in 1930 was 12 years for men and 14 years for women, so it’s safe to assume that nobody at that time entertained the thought that Social Security wouldn’t be able to provide the “social insurance” it was intended to provide. Nice thought.
Historic fact #4: The entire civilian labor force in 1933 (when FDR took office) was 51.8 million. In 2015 it was 158 million.
Interesting factoid #4: There are more people collecting Social Security benefits today (57.3 million) than there were in the entire labor force 90 years ago.
Social Security, you see, was a neat little system, and retiring Americans weren’t expected to burden it. In cold language, most Americans weren’t expected to live long enough to collect anything at all, and those who did…not very much.
So back then, who thought about retirement in terms other than sitting on the front porch rocker for the few years one had left? Almost no one, that’s who.
What a different story today.