Banking on a Good Investment Return


First Social Security benefits Ida May Fuller
Ida May Fuller holds the first Social Security benefits check.

Ida May Fuller (1874-1975) was the first recipient of United States Social Security benefits. Her first check arrived on January 31, 1940 and totaled $22.54. That was a pretty good deal for her, considering that she retired after having paid in only three years of payroll taxes, totaling $24.75. Mrs. Fuller lived for another 35 years. By the time of her death, at age 100, she received a total of $20,944.42 from Social Security — a return of 84,624%

Compare this to the benefits one might expect to receive today. According to a study by the Urban Institute, a single female earning an average wage who turned 65 in 2010 would have paid in a total of $361,000 in lifetime Social Security and Medicare taxes. In exchange, she would be expected to receive $302,000 from Social Security and $207,000 from Medicare — a return of 141%.

That’s still better than a single male who turned 65 that same year. His payroll taxes in the same amount as his female counterpart would be the same, but he could expect to receive only $457,000 in total benefits — a return of only 126.6%.

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