Most adults will be eligible for Social Security as soon as they turn 62. It can be a welcome supplement to your personal retirement savings, but it probably won't get you as far as you'd hoped. If you're counting on receiving a substantial sum from the government each month, you may be disappointed -- and you could be in financial trouble.

Here's a closer look at what Social Security is, how the program may change, and what you can do to supplement your benefits.

Social Security cards with $100 bill

Image source: Getty Images.

How Social Security benefits are calculated

You must work at least 10 years in order to be eligible for Social Security, though it pays to work for at least 35 years because your benefits are calculated based on your average monthly earnings from the 35 most profitable years of your life. If you worked more than 10 but less than 35 years, you are still eligible for Social Security, but your benefits will be considerably less because for every year you didn't work, you'll have a zero weighing down your average. You can get some idea of how much your Social Security checks will be by creating a mySocialSecurity account.

For most people, Social Security is only designed to replace about 40% of pre-retirement earnings, according to the Social Security Administration. But there are a few factors that influence this. First, the 40% figure is based on "average earnings." If you were a high earner for most of your life, you may find your Social Security checks do not quite add up to 40% of your pre-retirement income. On the other hand, if you had a low income, your checks may account for more than 40% of your living expenses.

The age that you begin taking benefits also matters. You may start taking benefits at age 62, but your amount per check will be reduced. In order to get 100% of your benefit amount per check, you must wait until you reach your full retirement age. This is either 66 or 67 for most adults today. For every month before your full retirement age that you take Social Security, your amount will be reduced. Someone with a full retirement age of 66 who begins taking Social Security at 62 would only receive 75% of their full benefit per check, while someone with a full retirement age of 67 would only receive 70%.

But it works the other way as well. Delaying Social Security past your full retirement age will increase your benefits. This maxes out at age 70 when you could receive 128% or 132% of your scheduled benefit, depending on if your full retirement age is 67 or 66, respectively. If you're able to wait, your Social Security checks will go much further.

Changes are coming to Social Security

Social Security can only carry on in its current form until 2034. After that, changes will have to be made in order to reflect the amount of revenue the program gets from payroll taxes and other sources. No one knows for sure yet what these changes are going to be, but a few possibilities have already been proposed, including:

  • Increasing the Social Security payroll tax to make up for diminishing funds
  • Raising the amount of earnings subject to Social Security payroll tax (currently all income above $128,400 per year is not subject to Social Security tax)
  • Raising the full retirement age (currently at 67 for adults born in 1960 or later)
  • Reducing the annual cost-of-living adjustments (COLAs), which ensure that the value of Social Security benefits keeps up with inflation
  • Reducing the amount of benefits

What does all this mean for you? It doesn't mean that Social Security is going to disappear or that you won't be able to depend on it at all. But it may not have as much to offer in 30 years as it does today. That's why it's more important than ever to prioritize personal retirement savings.

Ways to make up for what Social Security won't cover

If your employer offers a 401(k), this is a good place to begin saving for retirement, especially if your company matches your contributions. If a 401(k) isn't an option for you, you can always open an individual retirement account (IRA) on your own. The sooner you start saving, the better, because compound interest will have more time to make it grow. In 2018, you're allowed to contribute up to $5,500 to an IRA and $18,500 to a 401(k). Adults 50 and older can contribute up to $6,500 and $24,500, respectively.

A pension is another option, but few employers these days offer one. It gives you money for your retirement in the form of a lump sum or a regular monthly check, like Social Security. But instead of being funded by the government, your pension is funded by your employer.

Then there are annuities. Annuities are a good choice if you've already maxed out your 401(k) or IRA. There are no contribution limits, and the money is tax-deferred, so you won't pay any taxes until you withdraw the money from your account. Like 401(k)s and IRAs, money you contribute to an annuity will grow through compound interest and can provide a welcome stream of income in retirement.

Social Security has its place in a retirement plan, but it should be thought of as a supplement, rather than a primary source of income. Take the time to figure out how much you can realistically expect to get from Social Security, and work to make up the rest in your own personal retirement accounts.