Social Security-The Back Story

By Mark Bertrang on Thursday, February 10th 2022

Social Security was signed into law in 1935. It created a social insurance program designed to pay retired workers, age 65 or older a continuing income after retirement. (1)  After signing the Social Security Act, President Roosevelt said the following:  "We can never insure one hundred percent of the population against one hundred percent of the hazards ….. of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age."

Here's a fact most people would find hard to believe. The original Social Security Act lacked two important words – Retire and Retirement.  Nowhere are those words included in the actual document.  The act signed into law referred to the benefits payable as an old-age assistance plan. In fact, the age of sixty-five was the earliest age that an old-age benefit could be received, not age 62. Don’t you wonder why or how the age of sixty-five was chosen?

According to US life expectancy tables from the University of California-Berkeley (2), most men would have never received benefits when Social Security began in 1940, since the average age of death for men was 60.8 years and women weren’t much better off.  Their average death was 65.2 years.  Most people would never receive any benefits, whatsoever.  That’s why it was referred to as an old-age assistance plan, because most people at that time were either dead or considered old and expected to die soon.

Today, when you consider someone old, seldom would you think of someone in their sixties or seventies; maybe in their eighties, but I wouldn’t say it to their face.

Social Security was set-up as a public assistance program for old people who weren’t expected to live long.

It was “Public” assistance, because taxes were collected and then paid out.  You don’t have an individual account.  The money you may receive someday, isn’t yours.  The money you’re paying-in now, is going to someone else and the money you might receive someday will be coming from someone else who will be paying into the program then.  It was never really your money.

It was public “Assistance” – Just like president Roosevelt referred to; Social Security provides some measure of protection.  It tries to assistance you; but it simply wasn’t set-up to do it all.  The biggest responsibility is still your responsibility.

Today the average age of death is 77-years. (3) So, you and I have just assumed it just another pension that we should receive year after year, after year.  That wasn’t the original plan.

Don’t make your only plan, the public old-age assistance plan.  Social Security should be in addition to, not instead of, doing your own planning and your preparation.

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