How Are Social Security Numbers Assigned?

Updated on January 7, 2024

At a Glance

  • A Social Security number (SSN) is a nine-digit identifier issued by the U.S. government to citizens and residents.
  • SSNs help track income and determine benefits, being required for various purposes like employment, banking, and credit applications.
  • Initially created for retirement and disability benefits, SSNs are now assigned randomly to increase availability and hinder identity theft.
  • The number consists of an area number, group number, and serial number; the previous system based on geography was replaced in 2011 for greater efficiency and security.

Social Security Numbers are offered to all U.S. citizens, permanent and temporary residents, and it is essential to have one in order to have access to certain services. There are numerous people who own an SSN, but there are also individuals who don’t have one yet but are close to getting one and have no idea how these numbers are assigned.

If you are getting closer to obtaining an SSN and one of the questions on your mind is “How are Social Security numbers assigned?”, this article will give you an answer.

What Is a Social Security Number?

A Social Security number or SSN is a nine-digit number offered by the U.S. government to all citizens and residents who qualify to apply for it. The number is an identifier that helps track one’s income and also determine their benefits. Social Security numbers have been around for a very long time, more specifically since 1935.

The numerical identifier has been created as a part of The New Deal to provide disability and retirement benefits for people. Of course, while the purpose was initially to track one’s income and offer them benefits, nowadays, it has a few other uses. It can help identify people for tax purposes but also track credit reports and many other things.

For example, when opening a bank account or trying to obtain credit, a person living in the U.S. will have to provide their Social Security Number. The same applies when making major purchases or trying to obtain government benefits.

Who Needs an SSN?

Every U.S. citizen, permanent resident, temporary resident, or working resident will need a Social Security Number. There are only a few exceptions to this rule. Also, non-working residents can get an SSN too as it can come in handy for government entities and businesses.

Anyone looking to obtain certain benefits will need an SSN. For example, if you wish to apply for a job, you will be asked for your Social Security number by the employer. If you want to apply for a credit card or open a bank account, you will also need it. This is why it’s best to apply for it as you never know when you’ll need it.

How Are Social Security Numbers Assigned?

A process known as “randomization” makes it possible for Social Security numbers to be allocated to people. This process was introduced back in June 2011. It will give a number to every new Social Security cardholder in a random way and maintain the same nine-digit format. Also, this process eliminates old methods that were used when Social Security was created.

The various numbers that create the Social Security number allow the Social Security Administration to track the lifetime earnings of each worker. This way, it uses the information to calculate benefits and pay them.

In the past, before the 2011 change, the first three-digit numbers were used to identify the state the person belonged to. Then, the two-digit group of numbers allowed the numbers to be divided within the particular geographic areas. Lastly, the four digits individualized every full number.

But the previous system was meant for the older times, when Social Security data used to be stored in filing cabinets and required a different organization.

Advantages of the New Randomization System

Now that randomization has become a thing, assigning Social Security Numbers is much easier. It also comes with two advantages.

On one hand, it allows the nine-digit SSN to last longer. Back in the day, the range of numbers that could be offered to people within a certain state was very limited because of the old system. When the randomization was proposed, there were states that had less than 10 years’ worth of numbers that were not assigned.

On the other hand, this randomization system also makes things harder for identity thieves. Since the first three digits will not contain the geographical component anymore, thieves would have a much harder time trying to reconstruct the numbers of potential victims by using an address or other data available publicly.

There are now over 400 million available nine-digit numbers, so anyone in the U.S. can get one of them. The new system prolonged the life of the nine-digit combos.

Not to mention that the numbers available were increased as the new system allowed unused three-digit codes to be assigned. Moreover, the randomization did not cause any Social Security Numbers to be replaced. Only numbers that were offered to people since the new system was put in place are affected by it.

How to Decipher a Social Security Number

When Social Security numbers first appeared, the personnel working for Social Security needed a solution to sort the applications they received. There were no computers back then, therefore there was more work to do. With so many applications arriving at the office of the agency, things quickly got overwhelming.

To make things easier, Social Security officials decided to create a nine-digit SSN system that contained three parts. All these parts would be based on certain identifying information.

The Three Parts of the Social Security Number

The first three digits of the SSN represented an Area Number. This used to show the state from which the individual applied for the Social Security card for the first time. To make things easier, they gave the lowest numbers to the people in the North-East, whereas the highest numbers were given to the people on the West Coast.

Then, the next two digits consisted of the Group Number, which served to break all applicants from a particular area into smaller blocks. They were not assigned consecutively, though. Instead, the off numbers from 01 to 99 were given, then the even numbers from 10 to 98 were being assigned.

After all of them were assigned, even groups 02 through 08 were assigned, as well as off groups 11 through 99.

Lastly, there were the four-digit numbers at the end of the SSN, which represented the Serial Number. The numbers here were given to people consecutively starting from 0001 and going until 9999.

The system was changed a little bit in 1972, though. On the application, Social Security started requesting the individual’s ZIP code and not the state location of the office where the person applied.

The old system stopped being used in 2011, though, as the number of SSNs available per state was too limited. If they kept using the old system, they would have eventually run out of available SSNs. They switched to randomization, which is more convenient.

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Final Thoughts

Having a Social Security Number is a must if you want to be able to enjoy certain things like obtaining a job and getting some benefits based on your income.

The SSN will be required when applying for jobs, credit cards, bank accounts, or when making very large purchases, so it is important to apply for one and know what it means. Once you understand what the numbers mean and how the SSNs are assigned, you will also be able to understand why they are so important for identification.

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Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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