1935 may seem like a distant memory, but the impact of that year is still felt in the everyday lives of millions of Americans today. In 1935, the United States made a landmark decision that would change the way the nation cares for its citizens—the creation of Social Security. This program, signed into law by President Franklin D. Roosevelt on August 14, 1935, was part of the New Deal and laid the foundation for the modern social safety net.

The Creation of Social Security

The Social Security Act of 1935 was introduced at the height of the Great Depression, a time when millions of Americans were struggling with unemployment, poverty, and a lack of financial security in old age. The act aimed to provide a form of guaranteed income for retired workers, initially designed as a retirement system for the elderly. However, over time, it expanded to include survivors’ benefits, disability insurance, and supplemental income for the elderly and disabled.

Social Security was revolutionary for its time. It was the first large-scale federal program designed to ensure that older Americans would have financial support once they were no longer able to work. The program was funded by payroll taxes and has since become one of the most important social safety nets in U.S. history.

Cost of Living Adjustments (COLA) Since 1975

One of the most important developments in Social Security’s history came in 1975, when the program introduced automatic Cost of Living Adjustments (COLA). Before this, benefits remained static, and retirees often struggled to keep up with inflation. COLA was introduced to ensure that Social Security benefits would rise in line with the cost of living, allowing recipients to maintain their purchasing power despite inflation.

Since 1975, Social Security has been adjusted each year based on the Consumer Price Index (CPI), a measure of inflation. When prices rise, Social Security benefits automatically increase to help beneficiaries cover the rising costs of goods and services. This ensures that retirees, survivors, and disabled individuals don’t see their benefits eroded by inflation, maintaining a stable and reliable income source for millions.

The Importance of Social Security Today

Although Social Security was created nearly nine decades ago, it remains one of the most important programs in the U.S. Social Security provides vital financial support to about 65 million Americans, including retirees, disabled workers, and families who have lost a wage earner. For many, Social Security is the primary or only source of income in retirement.

The program has undergone several changes since its inception, expanding coverage and increasing benefits to meet the needs of a growing and aging population. Today, Social Security continues to offer peace of mind to millions, ensuring that even in retirement, individuals have a financial safety net.

Other Notable Events

• The Dust Bowl: 1935 marked one of the worst years of the Dust Bowl, with devastating dust storms hitting the Great Plains, displacing thousands of families and exacerbating the economic struggles of the Great Depression.
• The Hoover Dam Completed: The Hoover Dam, one of the largest and most ambitious construction projects of its time, was completed in 1935, providing vital electricity and water to the Southwestern U.S.
• The Neutrality Act: The United States passed its first Neutrality Act in 1935, aiming to prevent the country from being drawn into foreign conflicts as tensions in Europe and Asia were rising.
• Monopoly Released: The popular board game Monopoly was officially released by Parker Brothers in 1935, becoming an enduring symbol of American pop culture.
• Amelia Earhart’s Record Flight: In 1935, Amelia Earhart became the first person to fly solo from Hawaii to California, further cementing her status as an aviation pioneer.