The Social Security Act was a law passed in 1935 that set up the
Social Security system that continues to exist in the US to this day. The system has been
modified at times since 1935, but the basic set up remains the
same.
The Social Security Act set up a system whereby workers would
pay into a fund while they were working. After they reached a certain age, they would be eligible
to draw from that fund. These payments would be available to all, regardless of income or wealth.
Payments would continue for the life of the retiree. A person who lived a long time after
retiring would continue to receive payments, even if they exceeded what he or she had paid into
the system.
The point of this Act was to ensure that future
generations of older Americans would not be likely to face poverty after they
retired.
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