Congress passed the Social Security Act of 1935 to provide retired workers with a steady income in the form of old-age insurance. In 1939, amendments to the Social Security Act extended pay benefits to the spouse and minor children of retired workers, thereby expanding Social Security from a retirement program to a “family-based economic security program.” The first payment of Social Security benefits began in 1940. During the 1950s, Social Security covered about half of all Americans. Over the years, additional amendments have extended coverage so that everyone who works in America, including foreigners, is covered to some degree. A Social Security number registers workers in the Social Security system and they and their employers pay a small tax each month and they accumulate credits towards old-age insurance benefits. The number of years workers are in the system determines the amount of their monthly retirement payment. However this amount is not set for the rest of the retiree’s life. Cost of Living Adjustments, meant to compensate for inflation, increase monthly payments over the course of a worker’s retirement. Social Security is funded by the taxes withheld from workers’ paychecks during their entire working life in the United States. Click on CHARTS for more information.