People need Social Security information to keep track of benefits, financial information and employment records. Each American citizen is issued a Social Security Number, and the number's primary purpose is to submit correct reports for employees to receive Social Security benefits.
The Numerical Index File, or Numident, is the main database that keeps the information regarding Social Security Numbers. One record exists for each Social Security Number issued and is updated when each Numident receives new data on the individual. As of 2015, a Social Security number is required for bank accounts, tax return filings, federal loan applications and military service. At first, only individuals who were age 64 or younger could obtain Social Security Numbers, but that only lasted a few months since Social Security numbers were needed to identify workers for state unemployment compensation.
The first three digits are called the area number, and they represent the state or territory that the Social Security number originates from. For example, the numbers 010 to 034 are from Massachusetts, while 425 through 428 are from Mississippi. The next two digits designate the group number, and that number goes from 01 to 99 as new groups get assigned. The last four digits portray the serial number. There are a billion number combinations possible because Social Security numbers are nine digits.