Social Security has been a part of retirement life since it was established in 1935. Many of us think we know how it works, but how much do you really know? Here are nine things that might surprise you:
1. A massive trust fund
The Social Security trust fund is huge. It was $2.7 trillion at the end of 2024.1
2. Not everyone is covered
Most workers are eligible for Social Security benefits, but not everyone. For example, until 1984, federal government employees were part of the Civil Service Retirement System and were not covered by Social Security.2
3. You may qualify sooner than you think
You don’t have to work very long to be eligible. If you were born in 1929 or later, you generally need to work for at least 10 years to qualify for benefits.3
4. Your highest‑earning years count most
Benefits are based on an individual’s average earnings over a lifetime of work under the Social Security system. The calculation uses the 35 highest-earning years. If an individual has years of low or no earnings, those years may be included to reach a total of 35 years.4
5. Cost‑of‑Living Adjustments were not always automatic
There haven’t always been cost-of-living adjustments (COLA) for Social Security benefits. Before 1975, increasing benefits required an act of Congress; now, increases happen automatically, based on the Consumer Price Index. For example, there was a COLA increase of 2.8% for 2026 and an increase of 2.5% in 2025.5
6. A key source of retirement income
Social Security is a source of retirement income for 91% of current retirees.6
7. Benefits may be taxed
Social Security benefits are subject to federal income taxes, but it wasn’t always that way. In 1983, Amendments to the Social Security Act made benefits taxable, starting with the 1984 tax year.7
8. Early benefits were one‑time payments
From 1937 to 1940, Social Security recipients received a single lump-sum payment. These one-time payments were considered a “payback” to individuals who had contributed to the program. At the time, Social Security administrators believed these workers would not participate long enough to qualify for monthly benefits.8
9. The first benefit was just 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.8
