Social Security Act Essay Example

The Social Security Act was brought into effect on August 14, 1935. Taxes had been collected for the first time in January 1937, and the first lump-sum payment was made that same month. Regular ongoing monthly benefits started January 1940. In 1939, the law included benefits for the retiree’s spouse and children, called “Survivors Benefits” (New York Life 1). Disability benefits were then added in 1956. The current version of the Act has been reformed to include social welfare and social insurance programs (2). Social security is a social insurance program that is funded through dedicated payroll taxes. The best way to insure that Social Security does what it was intended to do – help provide a secure and comfortable retirement – is through a system of personal retirement accounts, which will allow workers to privately save and invest their Social Security taxes.
Retirement plans were first introduced to New Jersey teachers and New York Police Officers in the early nineteenth century. Many privately owned businesses began offering their own retirement benefits for their workers, known as formal pension plans. Government Social Security only occurred after the Great Depression. In 1935, Franklin D. Roosevelt advocated the public provision of retirement income during his presidential champagne, launching an Old Age Pension System that would provide annuity benefits to retired workers (Galasso 184). Initially, the plan was conceived as a fully funded system that would provide benefits without having to raise taxes or the national debt. But only a few short years later in 1937, the security system became a PAYG (pay as you go) system. Benefits were also extended to cover the retiree’s family/dependents. Later, an extensive plan was added to the program when the addition of Disability Insurance (DI) was inserted to protect workers and their dependents from income losses due to injuries during their work life. Signs of a breakdown occurred in 1972, when the