Social Security Retirement and Survivors Insurance




During the years immediately prior to the passage of the Social Security Act in 1935, states began passing legislation creating various forms of old-age pension programs that were based on economic need. However, these programs were generally inadequate and ineffective; by 1930 only 30 states had such a program and only about 3% of the elderly were actually receiving benefits. And when the Great Depression occurred in 1929, poverty among the elderly grew dramatically.

In a message to Congress in June of 1934, President Franklin D. Roosevelt announced his intention to provide a social insurance program that would allow workers to provide for their own future economic security once they retired. A little more than a year later, on August 14, 1935, Roosevelt signed the Social Security Act into law, creating a program that would pay retired workers age 65 and older a continuing income after retirement. In addition to the retirement benefits for the elderly, the Social Security Act also provided a wide range of additional programs to meet the nation’s needs, including unemployment insurance, aid to dependent children and grants to states to provide various forms of medical care. However, it did not achieve all the objectives of the original supporters, such as disability coverage and medical benefits; these benefits were achieved a number of years later.

In the original Social Security Act, benefits were based on payroll tax contributions the worker made during their working life but were only paid to the primary worker when they retired at age 65. The 1939 amendments to the Act made a fundamental change in the program by adding two new categories of benefits: payments to the spouse and minor children of a retired worker (dependent benefits) and survivor’s benefits paid to the family in the event of the premature death of a covered worker (survivor benefits). This change transformed Social Security from a retirement program for workers into a family-based economic security program.

Beginning in 1937, after Social Security numbers were assigned, the first Federal Insurance Contributions Act (FICA) taxes (special, dedicated taxes designated for Social Security) were collected. A special trust fund, the Social Security Trust Fund, was created for these dedicated revenues; benefits are paid from the money in this trust fund.

Social Security benefit payment amounts were originally fixed and were not adjusted annually for cost-of-living increases. It was not until 1950 that Congress first legislated an increase in benefits, and a second increase was legislated in September 1952. From that point on, until 1972, benefits only increased when Congress enacted legislation for this purpose. It was only in 1972, with the passage of legislation, that an automatic annual cost-of-living adjustments (COLA’s) was enacted.

In 1954, the Social Security Amendments initiated a disability insurance program, known as Social Security Disability Insurance; refer to Cash Benefits, Social Security Disability Insurance, Overview. And in 1965 President Lyndon B. Johnson signed the Medicare bill into law, with the Social Security Administration as the agency responsible for administering this new social health insurance program for the elderly and the disabled. Refer to Health Programs, Medicare, Overview.

In the early 1980’s the Social Security program faced a serious short-term financing crisis. President Ronald Reagan appointed the Greenspan Commission to study the financing issues and make recommendations for legislative changes. The final bill, signed into law in 1983, made numerous changes in the Social Security program, including the taxation of Social Security benefits, the first coverage of Federal employees under Social Security, and an increase in the retirement age.


The Social Security Administration, SSA, an independent federal agency, administers the Social Security Retirement and Survivors Insurance (RSI) program.


The Social Security system is funded through payroll taxes, known as the Federal Insurance Contributions Act (FICA), which are imposed on both employees and employers. Both the employer and the employee pay 6.2% on the first $160,200 in 2023 of an individual’s earned income in a calendar year. This earned income limit, known as the Social Security Wage Base, goes up each year based on average national wages. Self-employed individuals pay the full 15.30%.

In addition to the Social Security tax, individuals pay an additional 1.45% on all earnings for Medicare coverage. In addition, there are Medicare taxes on high wage earners. For more information refer to Health Programs, Medicare, Overview, Background, Funding.

A special trust fund, the Social Security Trust Fund, was created for these dedicated tax revenues. The Social Security Trust Fund has two separate components: the retirement trust fund and the disability trust fund. Contrary to popular belief this money is not put in trust for the individual employees who are paying into the system but is used to pay existing beneficiaries. Any excess is invested in U.S. Treasury bonds and is in reserve in the Social Security Trust Fund, which will be used to pay future benefits.

From these trust funds, SSA also pays the costs of managing the Social Security programs. Of each Social Security tax dollar an individual pays, SSA spends less than one cent to manage the program.

Summary of the Retirement and Survivors Insurance Programs

Social Security Retirement and Survivors Insurance provides a monthly cash benefit for retired workers and their dependents or survivors. Benefit amounts are based on payroll tax contributions, the FICA tax, that the worker makes during their working life. Eligibility is based on whether the worker is insured under the Social Security system (has earned sufficient Social Security credits or quarters of coverage) and whether the worker meets Social Security’s age requirements, and for eligible dependents/survivors, whether the insured worker is entitled to benefits or is deceased. Application for RSI can be made at local Social Security offices, some individuals may apply online or via the phone.

Other Benefits under Retirement & Survivors Insurance Program


A lump sum death benefit of $255 is payable to the insured worker’s widow/er who was either living in the same household as the deceased at the time of death or is entitled to survivor benefits; if there is no living spouse, a dependent child may be eligible for the lump sum benefit. See below, Description of Retirement & Survivors Insurance, Benefit Package, Lump Sum Benefit.


In addition to cash benefits, beneficiaries and eligible spouses are entitled to Medicare at age 65. Refer to Health Programs, Medicare.