The first US Social Security payout was just 17 cents
In January 1937 Ernest Ackerman collected a lump sum of 17 cents, the first money Social Security ever paid out. Three years later Ida May Fuller received the first monthly cheque, for $22.54. From those modest beginnings grew a programme that cost $1.244 trillion in 2022, about 5.2 percent of American GDP.
President Franklin D. Roosevelt signed the 37-page Social Security Act on August 14, 1935, during the Great Depression, as social insurance against old age, unemployment, disability and widowhood. Not everyone was convinced. Labor Secretary Frances Perkins recalled Senator Thomas Gore asking whether the plan was socialism, and then whether it was at least a teeny-weeny bit of it. In late 1936 the Post Office handled applications and mailed out cards bearing nine-digit numbers; John Sweeney received the first, though he died at 61 without drawing a retirement benefit.
The system kept expanding. Spouses and young children of retired workers were added in 1939, and a 77 percent cost-of-living rise came in 1950. Disability coverage arrived in 1954, early retirement at 62 in 1961 and Medicare in 1965. Automatic inflation adjustments became law in 1975. In the 1960 case Flemming v. Nestor, the Supreme Court held that Congress can revise benefits and that recipients have no contractual right to them. Reforms in 1983 began taxing benefits and raised the retirement age for younger workers.
Money comes mainly from payroll taxes, collected by the Internal Revenue Service, on earnings up to a legal cap of $184,500 in 2026. Coverage is nearly universal, with 94 percent of paid workers included, though about 6.6 million state and local government employees rely on separate pensions instead. Revenue ran ahead of spending from 1983 to 2009, building up the trust funds.
The retirement of the baby-boom generation is now drawing those reserves down. The 2026 trustees projected that the old-age and survivors fund would run dry in the fourth quarter of 2032, after which incoming taxes would cover 78 percent of scheduled benefits. Merged with the disability fund, which the law does not currently allow, reserves would last into 2034. The average monthly benefit was $1,903 in May 2025.
Source: Social Security (United States)
