This week, the Social Security program turns 80.
Signed into law as part of the Social Security Act on August 14, 1935 by President Franklin D. Roosevelt, the program was initially designed to pay retired workers but has since evolved to include payments for families of workers who pass away early and those who become unable to work. As we celebrate the program’s 80th birthday, let’s take a trip down memory lane to explore some lesser-known interesting facts and glimpse into what the future may hold.
Did you know…
… Where the payroll deductions for Social Security go? In theory, they’re held in trust by the government. It’s not, however, as if your money simply sits in a Social Security trust fund waiting for you to retire. Each year, after current beneficiaries are paid, the leftover money is used to buy bonds from the U.S. Treasury. So the trust has the bonds, but the money is now in the Treasury, where Congress can use it for any purpose.
… If you were born before 2011, your social security number (SSN) was generated using a fairly specific formula based on the zip code of the issuing Social Security office (likely near where you were born), the geographic “group” your number was issued in and how many SSNs had been generated prior to yours. This formula has changed completely though to one that’s much more complex and randomized thanks to the emergence of highly sophisticated computer software programs that can make shockingly accurate guesses as to what your SSN could be with only a few pieces of information. Given this change in how the SSNs are generated, your children are far less likely to have their SSNs hacked than you are.
… On the bright side, if you are hacked and experiencing ongoing issues afterward, you can request a new number. Another case for requesting a new SSN is if you have religious or cultural issues with certain numbers — You’ll have to provide documentation from your religious group with your request, though.
… Speaking of numbers, more than 40,000 people have claimed 078-05-1120 as their SSN. It all started in 1938 when a wallet manufacturer included a fake social security card as a way to show one of the pocket’s utilities in shipments of his wallets to Woolworth’s and other department stores nationwide. The problem, though, is that the fake social security card had a real number on it — one of the office secretary’s! The Social Security Administration has sorted through more than 40,000 incorrect earnings reports using this number, some filed as recently as 1977.
According to the 2014 annual report from the Social Security Board of Trustees on the current status and projected future of the program, without policy changes, the combined Social Security trust funds will become depleted and unable to pay scheduled benefits in full on a timely basis in 2033. After that, Social Security could pay about three-fourths of scheduled benefits through 2089. Various changes to the program have been proposed, some of the more popular of which are continuing to raise the full retirement age and increasing the payroll tax cap. One of the biggest challenges in reforming the system is that the crisis point is decades away and Congress tends to focus on more immediate, short-term issues.
While the future of the Social Security program remains to be seen, it’s worth taking a moment to reflect on as it turns 80 — So cheers, Social Security, have a happy birthday!