What today's workers can expect from Social Security tomorrow

Did you know that the age at which many workers will qualify for full Social Security benefits has risen from 65 to 67? If that's news to you, you're not alone: The majority of workers are still in the dark about Social Security eligibility requirements and many expect to qualify for benefits payments sooner than they actually will.

Combined with lingering questions about the long-term financial health of the overall Social Security program, these facts reinforce the importance of understanding exactly what you might expect from Social Security during your retirement.

The exact amount of your Social Security benefit will depend upon your earnings history. To help you get an idea of how much you might expect, the Social Security Administration will mail you an estimate of your future benefit each year, about three months before your birthday.

According to the SSA, your benefits will be there for you when you retire. However, the SSA also acknowledges that some changes to the present system may be required.

For example, when Social Security was created, the average life span was less than 65 years. But today, many people are living longer, healthier lives. And because the nation's 76 million Baby Boomers are approaching retirement, there will be nearly twice as many older Americans in 30 years as there are today.

Currently, Social Security takes in more in taxes each year than it pays out in benefits. But in 2016, according to estimates by the SSA, the amount of benefits paid out will begin to exceed the amount collected in taxes. Based on SSA projections, by 2037, the Social Security trust fund will be exhausted and payroll taxes collected will be enough to pay only about 73 percent of benefits owed. Recognition of these issues is growing, and legislators are now looking at funding and investment options to resolve them.

While your Social Security benefits are an important piece of the retirement income equation, you probably shouldn't plan to rely on Social Security alone for your future income. Your employer-sponsored retirement savings plan, company pension and personal savings may need to provide the major portion of your income in retirement.

If you'd like to learn more, please call me at 775-689-8704.

• William Creekbaum, MBA, CFP, a Washoe Valley resident, is senior investment management consultant of Morgan Stanley Smith Barney LLC. He can be reached at William.a.creekbaum@mssb.com or 689-8704. Tax laws are complex and subject to change. Morgan Stanley Smith Barney LLC, its affiliates and Morgan Stanley Smith Barney Financial Advisors do not provide tax or legal advice.