Social Security has been part of retirement life since it was established in 1935. Most people think they understand how it works. Here are nine facts that may surprise you.
The Social Security trust fund is substantial. It stood at $2.7 trillion at the end of 2024.
Not all workers are covered.Most are, but not all. Until 1984, for example, federal government employees were part of the Civil Service Retirement System and were not covered by Social Security.
You don't have to work your entire career to qualify. If you were born in 1929 or later, you need to work for 10 or more years to be eligible for benefits.
Benefits are based on your 35 highest-earning years. If you have years of low or no earnings, Social Security may count those years toward the 35-year total, which can reduce your benefit amount.
Cost-of-living adjustments (COLA) are a relatively recent feature. Before 1975, increasing benefits required an act of Congress. Now, increases happen automatically, based on the Consumer Price Index. The COLA increase was 2.5% for 2025 and 2.8% for 2026.
Social Security is a primary income source for most retirees. It currently provides retirement income for 91% of retirees.
Social Security benefits are subject to federal income taxes— but that wasn't always the case. 1983 amendments to the Social Security Act made benefits taxable starting with the 1984 tax year.
Monthly payments weren't always the standard. From 1937 until 1940, Social Security recipients received a single lump-sum payment, considered a "payback" to those who contributed but were not expected to participate long enough to receive monthly benefits.
The first Social Security benefit on record was 17 cents. In January 1937, Earnest Ackerman became the first person in the U.S. to receive a Social Security benefit — a lump sum of 17 cents.
Social Security is one piece of a broader retirement income picture. Understanding how it works — and what it doesn't cover — is a useful starting point.
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Brent Forrest & Associates, LLC. dba Wela Financial Advisory (Wela) is a registered investment adviser. The information presented is for educational purposes only. It should not be considered specific investment advice, does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. This article and images may have been enhanced by utilizing artificial intelligence (AI). Wela may discuss and display, charts, graphs, formulas which are not intended to be used by themselves to determine which securities to buy or sell, or when to buy or sell them. Such charts and graphs offer limited information and should not be used on their own to make investment decisions.
