"Neither Medicare nor Social Security can sustain projected long-run program costs in full under currently scheduled financing, and legislative changes are necessary to avoid disruptive consequences for beneficiaries and taxpayers." That's the clear message in the opening lines of the 2014 annual reports of the Social Security and Medicare boards of trustees.

The program in most jeopardy is Disability Insurance (DI), which is part of Social Security. The trustee report estimates the DI trust fund will be depleted late in 2016. Considering both Social Security retirement and disability benefits, the report estimates that the combined trust fund will be depleted in 2033.

This doesn't mean Social Security benefits will stop altogether in 2033. If these trust funds are depleted, according to current law, Social Security benefits must be reduced to the level that's supported by the amount of FICA taxes being collected from workers at that time. The trustee report estimates that tax income will be sufficient to cover about three-quarters of all scheduled benefits at that time.

But there's no doubt that benefit reductions of about 25 percent will be very disruptive to retirees because Social Security benefits are the largest source of income for most of them.