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The very first Social Security check was sent through the mail in 1940 even though President Roosevelt had signed the Social Security Act into law, 5 years earlier. Ever since, many American retirees, especially those without a 401 retirement plan, have been grateful to receive that monthly financial safety net as they entered their retirement years. It’s difficult to believe that Social Security has been with us for sixty plus years.

Originally, in the first version of the bill, Social Security benefits were to be paid solely to the principal worker. But, prior to the bill going live, additional benefits for the spouse and child dependents were included.

Many people mistakenly believe that the Social Security system is like an investment annuity, where you lend money to the government and let them invest it with the expectation that you will live off the resulting income. In truth, however, the system is closer to a government welfare program. The collection of payroll taxes , which funds the Social Security program, is handled under the authorization of the Federal Insurance Contributions Act, better known as FICA. FICA is like the enforcement arm of the system. It ensures that every worker “contributes” his or her fair share to the government pool.

Whenever a new generation of workers comes along, they assume the obligation of caring for the previous generation’s retirees. The sum of money that you eventually receive from the government has only a slight relationship to the amount of money that was withheld from your check over the years. From the very beginning, the system has collected over 9 trillion dollars from contributors and paid them out to recipients.

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