Benefits of Social Security
Social Security, known as a progressive system because lower-wage workers receive a higher return on their contributions for retirement, began deducting 1 percent (now 6.2 %, 7.45 % including Medicare coverage) of workers’ wages in 1937 and paid out its first monthly benefit check to Ida Mae Fuller (1) on Jan. 31, 1940. This retired legal secretary from Ludlow, Vermont, is a fine example of how well the system can serve its beneficiaries. Fuller, who paid a grand total of $24.75 in Social Security wage deductions from 1937 to 1939, retired at age 65 and lived to be 100. She received $22.54 every month, adjusted for yearly cost-of-living increases after the Social Security amendments of 1950, until her death in 1975. Altogether, she took in nearly a thousand times return of $22,888.92 on her $24.75 in withheld wages.
Since its inception, Social Security has paid out approximately $500 billion in benefits to millions of beneficiaries. Currently, close to 155 million Americans pay $700 billion into the Social Security Trust Fund each year.
(1) Social Security Online, Historical Background and Development of Social Security www.ssa.gov/history/briefhistory3.html