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Impact of Social Security on Retirement
Social Security Act was signed into law August 14, 1935. Social security was developed as a social insurance versus a welfare assistance. In the process of developing all that social security would entail to help the elderly, many changes have taken place to benefit not only the retirees but their families. Some of these changes would be disability coverage, medical benefits, future dependents, unemployment insurance, old-age assistance, aid to dependent children, grants to states to be able to provide for various medical needs and care. Social security evolved in the scope of long-range economic security through a contributory system for future retirement (SSA, 2022).
Evolution of Social Security
Taxes applied to social security applied to earning of $3000.00 or less in 1950. Tax cap increased between 1990 and 2022 from $51,300.00 to $147,000. Any amount above this is not subject to payroll or benefit payouts (Brandon, 2022). The original age to collect social security was 65 in 1961. However, if social security was collected at 62, payments were reduced. 1983 laws adjusted the retirement age to 66, collecting social security before the retirement age would reduce benefits claimed, however, waiting up until 70 benefits increased. Retires are able to apply for social security payments electronically and receive payment through direct deposit versus paper checks, whereas 80 years ago, social security was face to face interactions. When social security began, they received the same amount for 10 years despite cost-of-living adjustments
Original Intentions of Social Security
Social security was founded during the Great Depression impacting elderly causing unemployment and poverty. Many Americans lived away from their families. Social security was created to provide better health care, which increased life expectancy by providing benefits (Brandon, 2022). Aside from general welfare, it provided a social insurance program to help retired workers 65 and older receive income after retirement (SSA, 2022). Social security was developed in an effort to protect against poverty in old age as pensions and savings would not be enough to support the elderly years after their funds dissolved.
Legislative Impact
Social security payments were increased through special acts when Congress decided to boost payments. Primarily only taking effect during elections, similar to current years when promoting and attempting to gain votes. Congress passed a law in 1972 that would increase cost-of-living to match increase in consumer prices ranging from 0% to 14.3% from 1975-1980.