The program's concept is fairly basic. In essence, the federal government collects a portion of all working persons' income and distributes it to the nation's retirees. At the heart of the system is the Federal Insurance Contributions Act (FICA). When started in 1935 it appeared to work nicely. The small sums taken, never more than $300 per year from any salaried employee, seemed a meager price to pay to ensure that the nation's elderly could rely on a modest income to help with their living expenses.

However, somewhere along the way strange things happened. Beginning in the 1970s, sums taken from the contributors rapidly escalated so to cover the ever-increasing amounts paid out. Coupled with this, imposition of a succession of complex rules began twisting the system into an unintelligible labyrinth. Currently, a tax of 7.65 percent is accessed on both employer and employee, imposed on earned income up to $87,900. For self-employed individuals, the tax is the sum of these amounts for a total of 15.3 percent. As for distributions, monthly payments are in some way tied to income received during each retiree's working life. Rules are periodically enacted for such things as age eligibility for receipt, taxability of benefits, and various other parameters.

And where are we today? Accusations of impropriety abound from every quarter. Claims of coming insolvency are issued regularly. The arena is so thoroughly politicized that any predictions are suspect. Nonetheless, I will now list five changes that you may expect.

Taxability of benefits will increase. The first change likely to occur will be full, rather than the current 85 percent, taxability of Social Security benefits for those above the total income threshold. This amount is presently $25,000 for an individual and $32,000 for a married couple filing jointly.

Reduction of the taxability limits on benefits. The next alteration will probably be a systematic reduction of the threshold limits just described. Eventually you may expect that provision to be eliminated so that all Social Security benefits become fully taxable to all recipients.

Reimposition of an age ceiling for earned income. Until recently, a rule existed that limited benefit eligibility for recipients in the 65 to 69 age group that received earned income. Although this penalty no longer exists, it will probably be one of the provisions reinstituted in the future. Along with it, the exclusion cutoff age of 70 will be raised and eventually eliminated altogether.

Introduction of means testing. The three changes just described should not meet with much organized resistance. The reason is clear: none initially affect many recipients. The next change, means testing, will be a different story. At its simplest, this will eliminate eligibility to receive benefits for persons with annual income above some predesignated amount from all sources, rather than just earned income. It will naturally start with the highest incomes, but over time the limit will decline.

Imposition of assets testing. Finally, as the situation becomes more aggravated, assets testing will develop, where an individual's net worth determines entitlement. This might be patterned after the Medicaid program to the extent that if Social Security benefits are paid, for example, to the owner of a home with equity, a lien for those payments attaches to the property following the death of the recipient. Once again the threshold begins high and declines over time.

I give no guarantee in what order the changes might occur, but one thing is certain: Expect the final result to be limited only by the imagination and desperation of our nation's leaders.

For a clearer view of the likely future of the Social Security system, visit "Social Security: Where Does it Fit Into Your Future" in the Newsletter Archives on my Web site at www.onthemoneytrail.com.

AL JACOBS has been a professional investor for nearly four decades. His business experience ranges from property management and securities investment to appraisal, civil engineering, and the operation of a private trust company. He is the author of Nobody's Fool: A Skeptic's Guide to Prosperity. His monthly financial column, "On the Money Trail," can be found at www.onthemoneytrail.com