What is a Social Security Number?

Individuals in the U.S. use SSN for their credit, opening bank accounts, availing government benefits and making major purchases, among other financial activities. SSNs are susceptible to illegal use for identity theft and fraud. Le’s understand how SSN works!
Social Security Number
What is a Social Security Number?
A Social Security number (SSN) is a nine-digit identifier designated to a U.S. citizen, permanent resident and temporary (working) resident to keep a track of their income and decide related benefits to them. Here's everything you need to know about a Social Security Number (SSN), including how it works.
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The Social Security Number was introduced in 1936 to track and analyze social security benefit entitlements. Today, SSNs are used as an identification system. It is also used to identify and gather data on citizens working in the government sector and private sector.

With the enactment of the Social Security Act in 1935, one of the biggest challenges faced by the government was maintaining a record of beneficiaries’ earnings. Social Security policy is completely based on how much you earn over a tenure, your permanent address and authentic records. Let’s read more to find out! Also, check out Beem Tax Calculator to get a quick and accurate estimate of your federal and state tax refund for free.

What is a Social Security Number (SSN)?

Security number was developed to track a person’s earnings over time and impart their benefits. Till 2011, Social Security numbers (SSNs) were made up of nine digits divided into three parts, each preceded by a hyphen: xxx – xx – xxxx.

However, now the Social Security Number is a random stream of digits. Social Security voted to use it as a group number instead to prevent fraud. 

How Social Security Numbers Work?

If you are an American national, irrespective of nationality, permanent residency or temporary residency, you are assigned a Social Security number. Through SSNs, businesses and government bodies identify non-working residents (citizens and non-citizens alike).

Under Section 205(c)(2) of the Social Security Act (42 U.S. Code, Chapter 7, Subsection 405), Social Security numbers are assigned by the Social Security Administration (SSA).

Importance of Social Security Numbers

If you are a U.S. citizen and eligible for the Social Security number (even if you are just a resident), you will be allotted a 9-digit number by the government. The 9-digit SSN will then keep track of your income and work history.

Once you retire or unfortunately become differently abled, the government will decide whether you are eligible. It will also calculate the benefit you are entitled to purely based on your contributions to the social security fund.

The History of Social Security Numbers

Soon after the Great Recession, President Franklin D. Roosevelt developed the SSN system to help the citizens struggling with the doomed economy.

The SSN was supposed to help Americans have a stable economy, especially for those above 65 years old. The benefits included should be given to the citizens based on the income they used to get before retiring or before they became disabled.

Roosevelt also set up the Social Security Board under the Social Security Act to maintain the gatekeeping in SSNs. As a result, each individual was assigned a unique nine-digit number in 1936, which was the first time such a number was issued.

Components of the SSN

Area Number

A three-digit area number is the first group of three digits. It represented the state that issued the document. States could have more than one number depending on how many people needed SSNs. For example, in New Hampshire, area numbers range from 001 to 003; in Hawaii, area numbers range from 575 to 576.

East coasters generally have the lowest social security numbers. The number of assigned areas climbed as assignments moved westward. Thus, people living on the West Coast have the highest SSNs. In 1972, the area number was allocated depending on the zip code linked with the mailing address (which is not necessarily the place of residence).

Group Number

There are two digits in the following group number. There are 99 groups ranging from 01 to 99. There wasn’t necessarily a sequential order in which they were assigned. To help assign SSNs, they were initially issued to a state’s post offices in groups of 10,000. In their capacity as representatives of the issuance office, they attended.

Serial Number

The last four digits determine serial numbers in the third group. Each group progressed from 0001 to 9999. It is not necessary to use the serial number 0000.

Format and components of SSN

After 2011, SSNs started to be assigned arbitrarily. Throughout its history, SSNs have also been used differently. For example, a government agency was required to use them in 1943 to identify individuals. The SSN’s timeline also includes the following key moments:

  • In 1962, the Internal Revenue Service (IRS) began using Social Security numbers for tax reporting
  • As of 1970, all banks were required to collect Social Security numbers from their customers
  • In 1983, financial institutions needed your social security number to open an interest-bearing account
  • In 1996, SSNs were printed on driver’s licenses, birth certificates, and death certificates; in 1999, they were removed from those documents.
  • SSNs were no longer required for identification in 2008 due to the removal of laws requiring them.

How to Get a Social Security Number?

The following methods are available to get a social security number:

  • To apply for an immigrant visa in the United States, you must do so in your home country. You can reach out to the Department of State. Most immigrants can avoid visiting a Social Security office in the United States to obtain an SSN and card. You can get one just by visiting
  • The Social Security office nearest you can assist if you are lawfully present in the country. The Social Security Office requires the following documents from you. In the case of nonimmigrants, there are two possible ways to apply:
  • You can get an SSN or a replacement card by applying for a work permit from DHS, U.S. Citizenship and Immigration Services (USCIS).
  • You can also apply for employment authorization through Form I-765 (Application for Employment Authorization) or Form I-485 (Application for Lawful Permanent Residency). 
  • You should live in the U.S. with a work permit visa to get Social Security benefits.

Why You Need a SSN?

Since your SSN is responsible for your future eligibility for government benefits, it is imperative to have one.

Your SSN can record your yearly earnings and the years you have been employed. Information like health insurance, health care, disability income, and retirement are required to determine your potential financial benefits. 

Your potential employer will ask for your SSN when going through the application process. They will also ask for your salary payments, withholding for social security and medicare premiums your previous employer made to the Internal Revenue Service (IRS). If you live in a state that collects income taxes, you must disclose all this information to your new or first employer.


In today’s world, the value of an SSN goes deeper than calculating whether you’re eligible to receive payment to Social Security and Medicare or not. When acquiring a driver’s license, applying for a loan, availing of unemployment assistance, and opening financial accounts, you will need an SSN in all these cases and many other benefits.

For future purposes, you will be entitled to significant benefits if you have an SSN. Therefore, you should always keep the card with your SSN information and number safe and with you. Also, it is advised not to share it randomly with people and only use it for official purposes. Beem helps in generating a refreshed budget plan to allow you to take control of your spending habits & save money in the long run.


How Long Does It Take to Get a Social Security Number?

It will take 14 days for your Social Security card with your number to arrive by mail after your application is approved.

What to Do If Your SSN Is Stolen?

If you suspect your Social Security number has been stolen, contact the Social Security Administration. The agency can resolve income-related problems.

What is a Social Security number used for?

A Social Security number served only one purpose: to allow employers to report accurate earnings information to Social Security for use in administering benefits.

Can you work without a Social Security number?

A Social Security number is optional before you start working. However, the Internal Revenue Service states that wage reports must be filed using your SSN. 

What happens if you don’t have a Social Security number?

You cannot legally work in the U.S. without an SSN.

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Team Beem brings you the latest in the world of personal finance to you. From tips and tricks on how to manage money to how to get cash for emergencies, Beem is your destination for all the information you need to be smart about your money.

This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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