For the average American over 65, Social Security makes up nearly 40 percent of income. For about 20 percent, it’s their only income. The system has worked well for some 70 years now with few adjustments.

But, these days, it’s on everyone’s radar. That’s because President Bush has put Social Security reform at the top of his second-term to-do list. He and many others argue that big changes are necessary if Social Security is to survive, much less thrive.

But there are those, AARP included, who believe a radical overhaul could spell disaster. The questions to be asked are: Is the current Social Security system really at death’s door, or are the rumors of its demise greatly exaggerated?

Those who argue that Social Security needs a dramatic reorganization begin with the premise that the system is broke, and therefore Social Security, in its present form, isn’t sustainable. From there, the argument goes that what’s best is some form of privatization.

With privatization, a portion of the Social Security taxes now paid by workers would be diverted into an account that each taxpayer would control themselves.

So, is Social Security about to go bust? Not by a long shot. In fact, Social Security is in better shape today than at any other time since it was enacted in 1935. That’s because of some judicious adjustments suggested in 1983 by a commission set up by Ronald Reagan and headed up by Alan Greenspan. Since then, trust fund reserves have risen to $1.6 trillion.

Social Security trustees acknowledge that by 2028 the system will need to start redeeming the bonds in its reserve, but they calculate that the fund will be able to meet 100 percent of its obligations until 2042.

By that date, the principal will be exhausted, but the system will still bring in enough revenue from taxes to pay nearly 75 percent of benefits. An even rosier Congressional Budget Office report says the system will be able to pay full benefits until 2052.

Under these two studies, it doesn’t seem possible that 2018 is the year that the system will go broke. In fact, that’s only the year when benefit payments will exceed payroll tax revenue.

But, that’s not exactly cataclysmic, since from 2018 through 2027, incoming tax revenue, combined with interest earnings, will still be enough to pay benefits and build the trust fund balance.

Clearly a tune-up is needed to extend Social Security’s life beyond 2042. “But dismantling the whole system would be like buying a new car because the one you have has a flat tire,” said Peter R. Orszag, a senior fellow of economic studies at the Brookings Institution.

Advocates for reform, however, point out that once baby boomers retire, they will start taking more money out of the system than younger workers are putting in. The oft-cited statistic is that by 2040 there will have to be two workers to care for each retiree.

But that fact, while accurate, fails to acknowledge that workers today are more productive, earn higher wages, and plan to stay in the workforce longer-all factors that will help fill the future gap.

Once boomers start retiring it will put a strain on the system, “But it isn’t going to be Armageddon,” said Kenneth S. Apfel, former commissioner of the Social Security Administration.

We can strengthen Social Security by making small adjustments, just as we’ve done in the past. These would include raising the cap on wages subject to Social Security (currently you’re taxed on income up to $90,000), and investing part of the Social Security surplus in accounts that pay higher interest than the current Treasury bonds do.

The buzz phrase being bandied about by those who favor privatization is “an ownership society.” They favor taking a portion of Social Security taxes and diverting it to individuals to invest. They say such a system would give workers ownership of their money.

Those who oppose privatization, including AARP, argue that setting up private accounts would effectively scuttle Social Security. “Siphoning money from Social Security will not strengthen it,” according to David Certner, AARP’s director of federal affairs. “It will just make the problem much worse.”

First, the transition costs alone would be crushing-as high as $2-$3 trillion, according to AARP’s own economic analysis. “The amount of additional national debt that would generate could eat into any returns people might actually get from a private account system,” said Barbara Kennelly, president and CEO of the National Committee to Preserve Social Security and Medicare.

Second, diverting a portion of Social Security money to private accounts means that there would be fewer dollars available to pay Social Security benefits. That would leave the whole system with less of a reserve, as well as less cash on hand to pay beneficiaries. This situation would lead to hard choices such as cutting benefits or raising taxes.

“Under privatization, current workers will have to pay three times,” said Certner. “Once to ensure the benefits for those currently at or near retirement, once for themselves, and once more for those whose investments didn’t pan out.”

“In the current Social Security system, the risk is near zero. You know it will be there regardless of what the market does. That’s because U.S. Treasury bonds don’t crash when the stock market does,” he added.