Social Security Administration (SSA)

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on January 23, 2024

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What Is the Social Security Administration (SSA)?

The Social Security Administration is an independent agency of the U.S. federal government that administers Social Security, a social insurance program consisting of retirement, disability, and survivor benefits.

The SSA's primary role is to provide financial support to qualifying individuals who are retired, disabled, or survivors of deceased workers.

The SSA was established in 1935 to address the economic hardships faced by many Americans during the Great Depression.

It was created to provide a financial safety net for older Americans, widows, orphans, and disabled workers and has since evolved to cover various additional groups and benefits.

The SSA plays a vital role in the financial well-being of millions of Americans. It provides income to retirees, support to the disabled, and protection to families who have lost a working family member.

The SSA is an essential component of the U.S. social safety net and significantly impacts the economy and the lives of American citizens.

History of the SSA

The Social Security Act of 1935

The SSA was established as part of the Social Security Act of 1935, signed into law by President Franklin D. Roosevelt. This act created a social insurance program that aimed to provide financial assistance to retired workers, widows, orphans, and the disabled and laid the foundation for the modern SSA.

Evolution of the SSA Over Time

Amendments and Reforms

Over the years, the SSA has undergone numerous amendments and reforms to expand its coverage, benefits, and programs.

Some of the most notable changes include the introduction of disability benefits in 1956, the establishment of Medicare in 1965, and the introduction of Supplemental Security Income (SSI) in 1972.

Expansion of Benefits and Programs

The SSA has expanded its programs and benefits to cover more groups of people and address various social needs. Today, the SSA encompasses several programs, including Old Age, Survivors, and Disability Insurance (OASDI), Supplemental Security Income (SSI), and Medicare.

SSA Structure and Administration

Organizational Structure

The SSA is headed by a Commissioner, appointed by the President of the United States and confirmed by the Senate.

The Commissioner oversees the SSA's operations, supported by a Deputy Commissioner and various departments, including the Office of the General Counsel, Office of Budget, Finance, Quality, and Management, and Office of Retirement and Disability Policy.

Key Departments and Roles

The key departments within the SSA play crucial roles in administering its programs and services. These departments manage various aspects, including policy development, financial management, information technology, and legal affairs.

Funding and Budget

The SSA is primarily funded through payroll taxes collected under the Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act (SECA). These taxes fund the OASDI and Medicare programs, while the SSI program is funded through general tax revenues.

Social Security Programs

Old-Age, Survivors, and Disability Insurance

Eligibility Requirements

To qualify for OASDI benefits, individuals must have earned enough Social Security credits through their work history. The number of credits required depends on the specific benefit (retirement, survivor, or disability) and the individual's age.

Benefit Calculation

OASDI benefits are calculated based on the individual's lifetime earnings, adjusted for inflation. The SSA uses a formula to determine the primary insurance amount (PIA), which is the basis for retirement, survivor, and disability benefits.

Payment Distribution

OASDI benefits are typically distributed monthly, with payments adjusted annually to account for changes in the cost of living.

Supplemental Security Income (SSI)

Eligibility Requirements

SSI provides financial assistance to individuals with limited income and resources who are aged 65 or older, blind, or disabled. To qualify, applicants must meet specific income and resource limits and other non-financial criteria.

Benefit Calculation

SSI benefits are determined based on the individual's countable income, including earned and unearned income and certain in-kind support.

The federal benefit rate (FBR) sets the maximum monthly SSI payment, adjusted annually for cost-of-living increases. Some states also provide supplemental payments to SSI recipients.

Payment Distribution

SSI benefits are generally distributed on a monthly basis, with payment dates depending on the recipient's specific circumstances and the type of benefit received.


Eligibility Requirements

Medicare is a federal health insurance program for individuals aged 65 or older, certain younger individuals with disabilities, and people with end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS).

Eligibility is generally based on the individual's or their spouse's work history and the payment of Medicare taxes.

Enrollment Process

Enrolling in Medicare typically occurs automatically for individuals already receiving Social Security benefits. Others must enroll manually during their initial enrollment period or a subsequent special enrollment period.

Medicare consists of four parts: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage), and Part D (prescription drug coverage).

Coverage and Benefits

Medicare provides various health care services and benefits, including inpatient and outpatient care, preventive services, prescription drug coverage, and private insurance plan options through Medicare Advantage.

Social Security Programs

SSA Online Services

My Social Security Account

The SSA offers an online platform called "My Social Security," which allows individuals to access their Social Security records, view estimates of future benefits, manage their benefits, and more.

Online Application Process for Benefits

Applying for Social Security benefits, including retirement, disability, and Medicare, can be done through the SSA's online services. This streamlined process simplifies the application experience and allows for faster claims processing.

Requesting Replacement Documents

Individuals can request replacement Social Security cards, Medicare cards, and benefit verification letters through the SSA's online services.

International Social Security Agreements

Totalization Agreements

The United States has entered into international Social Security agreements, called totalization agreements, with several countries to eliminate dual taxation and provide benefit protections for workers who have divided their careers between the U.S. and another country.

Benefits for Non-citizens

Non-citizen residents may be eligible for Social Security benefits if they meet certain requirements, such as having a valid Social Security number, sufficient work credits, and lawful immigration status.

Coordination With Other Countries

The SSA coordinates with other countries' social security agencies to ensure the proper benefits administration for individuals who have worked or resided in multiple countries.

Public Perception and Impact

Economic Impact on Retirees and Disabled Individuals

The SSA plays a critical role in providing financial stability for retirees, disabled individuals, and their families and contributing to overall economic well-being.

Social and Political Debates Surrounding the SSA

The SSA and its programs have been the subject of ongoing social and political debates. Key issues include the financial sustainability of Social Security, potential reforms, and the role of the government in providing social safety nets.

Role of the SSA in the Broader US Social Safety Net

The SSA is integral to the United States social safety net and other programs such as unemployment insurance, food assistance, and housing assistance. These programs work together to support and stabilize vulnerable populations during times of need.


The Social Security Administration is a crucial agency that serves millions of Americans, providing financial support to retirees, disabled individuals, and families who have lost a working family member. Its programs and services are vital to the well-being of countless citizens.

The SSA faces ongoing challenges, including demographic shifts and financial sustainability concerns, which may necessitate reforms to ensure the continued provision of benefits to those who rely on them.

Proposed solutions range from adjusting retirement ages and benefits to increasing payroll taxes or implementing means-testing.

The SSA plays a pivotal role in shaping the financial landscape of the United States, contributing to the economic stability of millions of Americans and forming an essential component of the nation's social safety net.

As the agency continues to evolve and address challenges, it remains a critical institution for the country's and its citizens' well-being.

Social Security Administration (SSA) FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.

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