Here are ten random facts about Social Security that you may find interesting.
- Social Security was enacted when President Franklin Delano Roosevelt signed the Social Security Act on August 14th, 1935.
- Social Security benefits weren’t indexed to inflation until 1972.
- Social Security actually has two parts: “Old Age and Survivors” program and the “Disability” program. Most people are familiar with the first program, the second “Disability” program wasn’t added until 1956.
- There is actually a third part, “Supplemental Security Income.” That provides income to “aged, blind, and disabled people” without any consideration for prior work. The program is only administered by the Social Security Administration, its funding does not come from SS taxes.
- The current Social Security tax rate is 12.4%. Employers cover half, employees cover the other half. For the self-employed, you get the fun of covering both halves!
- The Social Security tax paid by employees has a threshold, above which you no longer pay Social Security tax. That threshold for 2008 is $102,000.
- In 1935, that threshold was $3,000! (and it wasn’t indexed to inflation)
- The threshold is indexed to the national average wage. In 1951, the threshold was 129% the national average wage. In 1998, it was 237%.
- In order to qualify for benefits under the “Old Age and Survivors” program, you must work at least ten years and earn at least $3,120 each year.
- In 2001, Social Security pays an average of $10,140 a year to those receiving old age benefits.