The Inaugural Full Retirement Age
When the Social Security Act was signed in 1935, it designated the age of 65 as the qualifying age for federal old-age benefits. This age was chosen based on a pragmatic assessment of domestic programs already in existence, such as state old-age pensions and the federal Railroad Retirement System, about half of which used age 65. Actuarial studies at the time suggested that an age-65 system would be financially manageable with modest payroll taxation.
Early Benefits and Subsequent Amendments
Despite the 1935 act, monthly benefits did not become available immediately. The program's initial phase, from 1937 to 1939, only provided lump-sum payments to contributors. The 1939 amendments accelerated the start of monthly payments to January 1940 and added benefits for dependents and survivors. The first regular monthly check was issued to Ida May Fuller in 1940.
Comparing Social Security in 1935 vs. Today
| Feature | Social Security Act of 1935 | Modern Social Security (post-1983) |
|---|---|---|
| Full Retirement Age | 65 for all recipients. | Gradually increases based on birth year, reaching 67 for those born in 1960 or later. |
| Earliest Claiming Age | Age 65 was the earliest age to receive benefits; no early eligibility option existed. | Earliest eligibility is 62, though benefits are permanently reduced. |
| Benefits Paid | Monthly payments were scheduled to begin in 1942, but 1939 amendments moved the start to 1940. | Monthly payments are standard for all who meet eligibility. |
| Program Scope | Primarily focused on providing federal old-age benefits to the primary worker. | Expanded significantly to include dependents, survivors, and disabled workers. |
| Tax Rate | Payroll taxes (Federal Insurance Contributions Act - FICA) were first collected in 1937 at 1% each for employers and employees on the first $3,000 of wages. | Current FICA tax rates are 6.2% for employees and employers (for a total of 12.4%) up to a taxable wage base. |
| Financing Structure | Initially planned to build a large reserve, though amendments shifted to a more 'pay-as-you-go' system. | Features a 'pay-as-you-go' system with trust funds that can be drawn on when tax revenues are insufficient. |
Limited Initial Coverage
The original Social Security Act in 1935 did not cover all workers. Coverage was largely limited to those in "commerce and industry," excluding significant portions of the workforce such as the self-employed, government employees, agricultural and domestic workers, and employees of non-profit organizations. The program's scope has since expanded dramatically.
The Shift to Modern Retirement Ages
The full retirement age (FRA) of 65 remained unchanged for decades following the initial 1935 act. The most significant change came with the 1983 amendments, which introduced a gradual increase in the full retirement age to reflect increases in life expectancy. This legislation created a sliding scale, increasing the age from 65 to 67 depending on birth year. For instance, those born in 1937 or earlier retained the FRA of 65, while those born in 1960 or later have an FRA of 67.
The Impact of Early Eligibility
Another crucial change was the introduction of an early eligibility age. While the 1935 act made 65 the earliest age for benefits, amendments later created options for earlier retirement with permanently reduced benefits. The early retirement age of 62 was established for female workers, widows, and other female dependents in 1956, and extended to men in 1961. This contrasted with the original 1935 program, which had a single retirement age for monthly payments. For a detailed history of these changes, consult the Social Security Administration's website.
Conclusion
In 1935, the Social Security Act established the retirement age at 65, with monthly payments not slated to begin until years later. This initial age was a pragmatic choice based on existing pension systems. The program has since evolved, with the 1983 amendments gradually raising the full retirement age to reflect increased longevity. Understanding the original legislation provides important context for how the program began and highlights the fundamental differences from the modern system.
- Social Security Administration: For comprehensive information on the program's history and current regulations, the SSA website is the authoritative source: https://www.ssa.gov/
