The United States Social Security Administration (SSA) is charged with the oversight of the U.S. Social Security program. This program uses funds derived from federal payroll taxes to provide monthly income benefits to those at retirement age, disabled people, and the surviving spouses of those who were receiving benefits. The current retirement age in the United States is 62. The longer one waits to claim benefits, the higher the payouts can be.
History of the US Social Security Administration
During the New Deal era, President Franklin Roosevelt designed a comprehensive economic program to help the United States emerge from the Great Depression. During this time, he create a financial safety net for the elderly and the economically disadvantaged. Although the Social Security Act was signed in 1935, the first Social Security office opened in 1936.
Ten years later, President Harry Truman converted the Social Security board into the Social Security Administration as part of his Reorganization Program. In the 1950s, the SSA was moved under the supervision of the Department of Health, Education, and Welfare. This department was later renamed the Department of Human Services. The SSA remained here until 1994 when President Bill Clinton restored its status as an independent agency.
How Social Security Works
Payroll taxes divert a portion of workers’ income into Social Security accounts. These taxes are also used to pay for Medicare, the program’s health care counterpart. In 2015, payroll tax made up roughly twelve percent of an employee’s paycheck.
The taxes collected for Social Security divert to a fund from which retired employees may draw from once they reach age 62. Because life expectancy has increased since the program was first conceived, the SSA periodically increases the minimum retirement age in order to reduce the current imbalance between revenue and expenditures.