Social Security Administration (SSA): What It Is and How It Works

What Is the Social Security Administration (SSA)?

The Social Security Administration (SSA) is a U.S. government agency that administers social programs covering disability, retirement, and survivors' benefits, among other services. It is also responsible for issuing Social Security numbers and managing the program’s finances and trust fund.

Understanding the Social Security Administration

The SSA administers the Social Security program. Social Security is a vital part of the retirement income planning strategy of many Americans, particularly as savings rates remain low—5.4% as of May 2022.

More than 65 million Americans, including retired workers, disabled workers, and survivors, received Social Security benefits in June 2022, according to the SSA. Social Security is one of the largest government programs in the world.

The benefits are funded with payroll taxes paid by employers, employees, and the self-employed. The tax revenue goes into two Social Security trust funds—the Old-Age and Survivors Insurance (OASI) Trust Fund for retirees and the Disability Insurance Trust Fund (DI) for disability beneficiaries—which also make the benefit payments. 

The SSA also administers payments to 7.6 million Supplemental Security Income (SSI) recipients. SSI, which is distinct from Social Security and is not funded by payroll taxes, aids the disabled, blind, and elderly with limited income and resources.

Unlike most U.S. government agencies, the SSA is headquartered in Baltimore, Maryland, rather than Washington, D.C. The SSA has 10 regional offices, six processing centers, and approximately 1,230 field offices in cities across the country. It employs almost 60,000 workers.

Social Security Administration Services

In addition to overseeing retirement and disability benefits programs and administering SSI, the SSA provides a wide range of services, including enrollment in parts A and B of the Medicare program.

It also issues the Social Security numbers (SSNs) required to access numerous government and private-sector services, from credit financing and insurance coverage to hunting licenses.

History of the Social Security Administration

The Social Security Board was created in 1935 when President Franklin D. Roosevelt signed the Social Security Act into law. The SSA has since gone through numerous name changes and operational revisions under different presidential administrations. The SSA was part of the Department of Health and Human Services until 1994, when it regained its original status as an independent agency.

In July 2021, President Biden fired SSA commissioner Andrew Saul and appointed Kilolo Kijakazi, deputy commissioner for retirement and disability policy at the SSA, as acting commissioner. Saul was criticized for efforts to reduce access to disability benefits, delays in providing the information needed to issue stimulus payments, and clashing with employee unions over COVID-19 safety protocols, including remote work.

While the SSA is an independent agency and Saul's term was not due to expire until January 2025, two Supreme Court rulings have given presidents greater authority to remove appointees. One, in June 2020, determined that President Trump was free to fire the head of the Consumer Financial Protection Bureau (CFPB), and a second, in June 2021, authorized President Biden to remove the chief of the Federal Housing Administration (FHA).

Social Security Administration: Annual Report

Every year, the board of trustees of Social Security issues a report on the current and projected financial status of the SSA's programs. In the 2022 report, the Social Security Board of Trustees projected that the reserves of the Old-Age and Survivors Insurance Trust Fund (OASI) will be depleted in 2034 (versus 2033 in the 2021 report), amid the swing to annual funding shortfalls as a result of Baby Boomer retirements. At that time, payroll tax receipts will be sufficient to pay 77% of scheduled benefits.

Meanwhile, the Disability Insurance Trust Fund (DI) is now expected to maintain a surplus over the next 75 years, after the 2021 report predicted its reserves would run out in 2057. In 2022, the trustees cited a persistent decline in the volume of disability claims.