In the midst of the Social Security debates, here's the first thing you have to know. Social Security is not in some form of terminal crisis.
It's a serious challenge but not a sinking ship. Young people won't be left empty-handed unless they vote to let that happen. The problems are fixable, with incremental change in benefits, taxes and, eventually, borrowing.
Many reformers have Social Security's basic premise in their cross hairs.
They're challenging the idea of a guaranteed payment plus a cost-of-living adjustment. They'd prefer a smaller fixed benefit plus a personal investment account. Income taxes would help pay Social Security's future obligations, so that part of the today's payroll taxes could go into private accounts.
But what you need to know, in this election year, is that we don't have to switch to private accounts in order to "save" the system. Private accounts are an entirely separate question.
Amid the political sloganeering, here are some fundamentals to keep in mind:
Social Security isn't going bankrupt, as opponents of the current system love to claim. They fling around the word "bankruptcy" to keep you scared and make you think you have to sign on to their plan or else.
In 2037, Social Security's surplus (or "trust fund") will run dry, under current projections. But payroll taxes keep coming in.
Those payroll taxes alone could finance 72 percent of current Social Security benefits, to young and old alike. As gazillions of technical experts point out, it's doesn't take huge adjustments in taxes and benefits to cover the rest of the bill.
Can anyone imagine a Congress that fiddles while grandmas and orphans don't get their full checks on time?
But shouting "bankruptcy" pays off, politically. Only bores complain. (To check your own future benefits, go to www.ssa.gov or call 800-772-1213.)
The Social Security trust fund isn't a joke. It is a genuine contributor to the sturdiness of the system. It's a promise to pay, secured by Treasury securities, which in turn are secured by taxpayers.
The government has to use the money currently pledged to Social Security for whatever the voters decide Social Security benefits should be.
Withdrawals from the trust fund are expected to start in 2015. Where will the Treasury get the money to meet its pledge?
You usually hear about three possibilities - raise taxes, chop benefits or cut deeply into other spending. But there's a fourth option: the government could borrow some of the money.
In fact, that's a strong argument for repaying the debt that's held by the public today. By greatly reducing what we owe, we'll be in good shape if we want to borrow in the future.
We ran up debt in the 1980s to pay for military and other programs, and now are paying it down. Why not use this option again, to get past the boomer retirement hump?
By the way, we've already had a small trial run on redeeming government chits. Medicare drew on its hospital trust fund from 1995 through 1997, while Congress readjusted the program. Today, that fund appears to be good through 2025.
We don't know, for sure, that the Social Security trust fund will be exhausted in 2037. That's a projection.
Social Security's trustees have assumed slower economic growth than we've averaged over the past 75 years. That's based on a projection of slower population growth.
If it turns out that future growth equals that of the past, the Social Security problem all but goes away, says consulting actuary David Langer in New York City.
You can't assume that either, of course - especially if benefits are increased. But the uncertainty of 75-year projections suggests a cautious approach to any major overhaul.
There will be fewer workers to support each future retiree, but the burden may not be as bad as you think.
You have to consider the total number of dependents per worker - children as well as grandparents - and people have fewer children today. It's projected that in 2030 workers will be supporting more dependents than they do now, but fewer dependents than they did back in 1960.
Inevitably, the elderly are going to cost more, because there will be more of them. That's going to be true, no matter how the system changes.