What Would Ida Mae Say?!
/Ida Mae Fuller. Ever hear of her? Probably not. In January 1940, she received a check for $22.54. It was the first-ever U.S. Social Security check issued. I suppose, back in 1940, that little check provided a lot more to Ida than it would to you or me in 2025.
In fact, despite our ongoing issue with homelessness and hunger among a small percentage of our population today, we Americans have come a long way since 1940. Most of our elderly citizens are safe, reasonably comfortable, and cared for relatively well – unless something awful happens. That wasn’t always the story. Just 100 years ago, when my grandparents were young, a senior citizen who lost a job or suffered an accident or illness or loss of a breadwinner went to the “poorhouse.” By the time Social Security was signed into law in 1935, every state but New Mexico had a “poorhouse” program. Forced to be an “inmate” there was a dreaded fate.
More than 2000 such poorhouses were federally inspected in the 1920s, and the report was shameful: “...sick people are thrown together with the well...people of culture and refinement with the crude and ignorant and feeble-minded...” And then the Great Depression hit, and banks failed; 25% of all workers – and 37% of all nonfarm workers – were unemployed. Americans starved to death, literally.
The eventual solution, Social Security, had been a topic of bitter controversy for years. The bill had faced lobbying and negotiation and compromise by the time it was signed into law by President Franklin D. Roosevelt in 1935. The concept had been debated in Congress and on factory floors, in the press and in church halls. Proponents saw the devastating effects of poverty on an ill-prepared populace; opponents assumed such a government-run payment program must be “communist.” And, anyway, who could trust the government to pay out what it had collected?
An Insurance Program, not a Handout
President Roosevelt saw this new program for what it would become and remain today: an insurance program for which the insured pays “premiums,” not “taxes,” and then receives an earned future payout. He saw its potential as a work-related employee benefit program to promote a strong work ethic along with a commitment to older workers who had done their fair share. This was not public assistance; this was social insurance. The intent was to provide a reliable retirement benefit to people at age 65; they would have earned the payment – it was not a handout. President Roosevelt called it a “measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”
Today, Social Security (SS) is a reliable, comprehensive insurance program that provides protection for workers and their dependent family members, protecting against loss of income in the following categories:
Retirement benefits — for workers who retire from the workforce and have reached an eligible age (currently 62 for reduced benefits and 67 for full benefits)
Family benefits — for family members who are dependents of workers who have become totally disabled or retire
Survivors benefits — for surviving family members of workers who die (similar to life insurance)
Disability coverage — for workers who become totally disabled and can no longer work even though they have not reached retirement age
The Current Threat
Look what’s happening now. News sources report that retiring and disabled Social Security applicants are learning they would be required to appear in person at a local SS office to verify their identity rather than calling on the phone to claim benefits. This is occurring at the same time that many local SS offices, according to public sources, are being closed across the nation to save money! Although President Donald Trump publicly proclaimed repeatedly during his campaign and as president that he wouldn’t cut a penny from Social Security, his DOGE team has begun to reduce the already understaffed Social Security workforce by more than 10%. On the other hand, Trump has also promised to eliminate any tax on Social Security.
On April 8, the press reported that the Social Security Administration had wrongly informed some very low-income recipients of Supplemental Security Income (SSI) that they were no longer receiving benefits. The mistake was corrected within days, but it caused unnecessary anguish for those families. Since SSI is administered by the Social Security Administration, which has been accused of being “rife with fraud” and “the biggest Ponzi scheme of all time” by Elon Musk of DOGE, what might have been a manageable blip instead became a calamity.
Americans are on a see-saw, especially about their retirement planning, and that begs the question: Why aren’t we united in our demand that the current administration leave Social Security alone? Do some people actually believe that the Social Security program gives away more than it takes in and will, therefore, go bankrupt? Do they believe the office is rife with abuse and overstaffed and performing poorly? DOGE made allegations of checks going to people 150 years old, but they were quickly and convincingly debunked. So, what gives? I turned to a friend who knows way more about this than I do: Lois A. Vitt.
Twenty years ago I met Lois – sort of – when I was randomly chosen by my employer to edit Lois’s book manuscript: Ten Secrets to Successful Home Buying and Selling. We worked together on numerous projects after that, although she was on the east coast and I was on the west coast. I got to help her with You and Your Money, and we actually met in person very briefly when Lois came to speak at a conference I was helping to organize. As you might guess, I inhabit a different planet than does Lois, in her field concerning the Social Psychology of Finance. The founding director of Institute for Socio-Financial Studies, Lois “intersects” with me when we need to work together to communicate something about finance: She does the logic, the history and numbers, and I polish the words. And so, about Social Security...
About ten years ago, Lois conducted a comprehensive study to determine how well informed Americans are about Social Security, and how and where they get that information. She examined SS education by employers, the U.S. military, church groups, community organizations, high schools and post-secondary schools and more. She reviewed relevant academic literature and online sources individuals might turn to for SS information and interviewed policymakers and thought leaders. What she discovered was not encouraging.
Do we even know what we’re talking about?
In a report called Lifting Moods and Retirement Literacy through Education about Social Security, Lois wrote that, despite the financial literacy education movement that arose in the 1990s, “knowledge about Social Security basics is lacking for many Americans which could negatively impact their current well-being and later life in retirement.” She points out that most courses in financial literacy and personal finance (even in retirement) omit information about Social Security. While employers continue to offer information on retirement benefits, by the early 2000s that financial education focused solely on employer-sponsored defined contribution plans; Social Security is seldom addressed. The focus tends to be on company-sponsored 401K programs, and people simply aren’t given a view of SS as the foundational retirement benefit it was meant to be.
And what of all those other sources of personal financial literacy? Lois reported that faith-based groups, schools and other community sources, focused on personal savings and preparation for emergencies, simply fail to teach about Social Security. Perhaps even more surprising was the result Lois and another researcher found when they looked at books on shelves: “Of 150 personal finance books found in a public library, only 19 mention Social Security. Of 75 new titles at a Barnes and Noble store, only 12 had information about Social Security. Forty-one ‘money books’ for youths were examined; 4 briefly mention Social Security.”
So, how do we improve things?
My friend Lois offered specific suggestions for how Social Security Education can be included in various employment and community venues, and also suggested improved ways to address the topic. For instance, she urged the SSA to engage with individuals of all ages in order to make clear the “foundational employee benefit” role and nature of Social Security protection, not just for themselves (someday), but for their parents, grandparents, their other family members, friends and neighbors. She suggested re-branding SS benefits as social insurance, not “entitlements” or even “taxes” which are both negative names for a program that has successfully helped generations of Americans of all ages and life stages avoid poverty over nearly a century.
Finally, let’s get our story straight. “Politicians and their very wealthy patrons,” Lois says, “frequently warn that Social Security is headed for bankruptcy. Not true – until now of course. If the programs, operational norms and structure of Social Security continue to be physically and psychologically attacked across the nation, wasting the surpluses the program previously has been running, then we’ll have a problem. The Social Security program has amassed a trust fund reserve now amounting to $2.5 trillion.”
To preserve the viability of Social Security, Congress must act, but the fights over privatization and/or reducing waste and fraud have gotten us nowhere. Simply put, the whole purpose of social insurance is to provide government-based solutions to problems that can be caused by, but cannot be solved by, private industry. Consider this: 401(K) retirement plans can be matched in any amount by employers, but they seldom top a few percentage points. On the other hand, Social Security matches Americans’ contributions to their SS accounts on a dollar-for-dollar basis.
A Call to Action: Let’s travel forward
Few of us expected mass firings, closed offices, destructive leadership and purposeful risk and disruption to the private financial records of the American public, all of whom have Social Security cards and private information on file within the Social Security Administration. So what can we do to protect ourselves and the remnants of our formerly efficient and well managed Social Security program? The betrayal and prospective planned loss of our Social Security is unthinkable.
Let’s take this seriously and call our representatives in Congress to let them know how we feel. Let’s put on our jackets and boots and join friends, neighbors, and family members to make small crowds and larger crowds, until they grow into masses of Americans who wish to travel forward, not backward into the last century. Let’s not return to the poorhouse program. We must not passively tolerate leaders who continue to be indifferent to our prospective plight as older workers or dependents without means. Speak up, please.