Before Social Security, in 1934, roughly one half of seniors were estimated to be poor.
Without Social Security benefits, 37.8 percent of elderly Americans would have incomes below the official poverty line. Most people aged 65 and older receive the majority of their income from Social Security.
(Prior to this time, most Federal government workers and officials were participants in the Civil Service Retirement System (CSRS) which came into being in 1920 –15 years before the Social Security system was formed. For this reason, historically, Federal employees were not participants in the Social Security system.)
people aged 80 and older lived in poverty, compared with poverty rates of 9.2% among individuals aged 75-79, 7.4% among those aged 70-74, and 8.4% among those aged 65-69. Women aged 80 and older had the highest poverty rate among older women and men in all age groups at 13.6% for women aged 80 and older.
The population in poverty was approximately 45% in 1870, it declined to around 30% by 1910, only to reach about 45% again in the mid 1930’s and decline again to near the 30% mark by the early 1950’s (Ornati 1955; Hurst 2004).
Only a small percentage of older Americans, 6.8 percent, receive income from Social Security, a defined benefit pension, and a defined contribution plan. A plurality of older Americans, 40.2 percent, only receive income from Social Security in retirement.
They Relied On Extended Family Without a job, a pension, savings or children to rely on, some Americans had to lean on their extended family to get by in the era before Social Security. Aunt, uncles, cousins and beyond were often tapped to provide assistance for elderly family members with no other means of support.
Before the Great Depression, the care of the poor ofall ages was a responsibility assumed primarily by the private sector, generally through the extended family, friends and neighbors, and organized private charity.
As a stop-gap measure, Congress passed legislation in 1981 to permit inter-fund borrowing among the three Trust Funds (the Old-Age and Survivors Trust Fund; the Disability Trust Fund; and the Medicare Trust Fund).
The Social Security Administration (SSA) estimates that of the over 46 million Americans receiving Social Security retirement benefits… 21% of married couples and 45% of single persons rely on Social Security for 90% or more of their income.
Workers Compensation programs were established at the state level before Social Security, and there were state welfare programs for the elderly in place before Social Security.
The maximum federal SSI benefit is less than the federal poverty level (FPL), $794 per month or about 74% FPL for an individual, in 2021. As a result of the SSA’s strict disability determination rules, not all people with disabilities qualify for SSI. States generally must provide Medicaid to people who receive SSI.
The Great Depression of the 1930s brought thousands of people, and even entire regions of the country, to their knees. The sudden, catastrophic economic downturn that followed the Wall Street crash of 1929 caused widespread homelessness, poor health and early deaths, and the creation of shantytowns in urban areas.
For a family or household of 4 persons living in one of the 48 contiguous states or the District of Columbia, the poverty guideline for 2021 is $26,500.
In the late 1950s, the poverty rate was approximately 22%, with just shy of 40 million Americans living in poverty.