How do Social Security numbers work?

A Social Security Number (SSN) is a unique, nine-digit number assigned to an individual upon application to the Social Security Administration.

All U.S. citizens over the age of 18, who receive an income, must have a SSN, according to the U.S. Internal Revenue Service (IRS).

In 1943, an executive order required that federal agencies use the SSN in their new record-keeping systems. The IRS further requires that all employers use the employee's SSN, or Taxpayer I.D. Number (TIN), to report his earnings to them.

A SSN fingerprints a person for his lifetime, and goes with him to the grave. As each SSN is unique, the number's initial record-keeping role for the worker and the government to track Social Security entitlements, broadened.

Private entities, such as hospitals, banks, and brokerage firms realized the vast benefits of the SSN as a personal identifier, and adopted it as a form of positive identification.

The nine-digits of the SSN are divided into three parts, each separated by a hyphen. The first three digits, the area numbers, are based upon the zip code in the applicant's mailing address on the original application form. The second two numbers are the group numbers, ranging from 01 to 99, which serve to break the SSNs with the same area numbers into more manageable blocks. The final four digits of the SSN, the serial numbers, run consecutively from 0001 to 9999 within each group designation.

The SSN is the cornerstone of the U.S. Social Security system, which legislators established through the Social Security Act of 1935 as part of President Roosevelt's New Deal. The underlying goal of the system is to provide old age, disability, and survivors insurance, as well as supplemental security income, which provides an income for elderly or disabled people. It is mandatory that employers, employees, and the self-employed pay Social Security taxes into a vast pool of funds, which is held in a special trust. Upon a major life event, each receives his share of benefits, according to the amount he has paid into the fund, up to a certain amount, and also according to his need. Technically, Social Security pays higher benefits to those with lower incomes and those in need, than to those of substantial means. Ideally, taxes paid into the Social Security system by employers and employees today, fund the benefits being drawn upon by those eligible today.