When it comes to Social Security, the changes looming in 2015 aren’t that major. It’s the challenges that lie just a few years ahead that look more serious.

The average retiree’s check will rise by 1.7% in 2015, the Social Security Administration says. The average retiree in January 2015 will receive $1,328, up from $1,306. For workers, the first $118,500 of earnings will be subject to Social Security tax, up 1.3% from $117,000 in 2014. That’s the smallest jump since the period between 2009 and 2011, when the income subject to taxes didn't climb at all.

Clients who expect to claim benefits upon reaching full retirement age in 2015 will be eligible for a maximum of $2,685.50 per month. That's up from $2,642 this year and is based on changes to the benefit calculation that compares your salary to the Social Security wage base each year. If you delay benefits past full retirement age, benefits increase about 8% per year until a client’s 70th birthday, at which point the increases stop. 

Social Security is the cornerstone of middle-class retirement, and plays a surprisingly large role for even relatively affluent retirees, the Investment Company Institute reports. In 2013, it provided 57% of Americans’ retirement income, and more than 85% of the retirement money for seniors with incomes in the lowest 40% of the population. Even for retirees in the top income quintile, Social Security provided one-third of retirement income in 2013 and replaced 29% of average lifetime income.

The estimates are based on a cohort of retirees and near-retirees born in the 1940s, the institute says.

Foundation of Retirement Savings

The ICI, a trade association for mutual fund companies, argues that the traditional concept of retirement as a three-legged stool supported by Social Security, pensions and savings is obsolete. Instead, near-retirees’ actual finances are more of a pyramid, with Social Security as its vital bottom layer.

“For most households, one of the most valuable resources is their Social Security retirement benefits,” The ICI wrote in a recent report. “”However, this resource is typically not included in measures of household wealth.’’

Benefits are enough to replace about 36% of average lifetime annual earnings for affluent families, and as much as 58% for a low-paid worker, the institute says. “Under current law, these replacement rates are expected to remain stable,” the report says. (For more, see: Top 6 Myths About Social Security Benefits.)

A Rising Share of Benefits

Social Security payments, which went up substantially in the 1970s and have been adjusted for inflation since benefit formulas were trimmed in 1983, are an even larger component of retirees’ balance sheets, according to the ICI. For families in the bottom quintile, the capitalized value of their expected benefits equals 82% of their wealth. In the middle fifth of the population, expected Social Security benefits work out to 41% of their wealth, and even for the top quintile (excluding the top 1%), Social Security is still the equivalent of 14% of assets.

By comparison, housing wealth is about 22% to 23% of total assets for families in the top three quintiles, according to the report. Defined-contribution plans, such as 401(k)s and Individual Retirement Accounts, contribute between 11% and 18% in higher brackets, and only 3% for the poorest retirees. (For more, see: Maximizing Your Social Security Benefits.)

Stable … For Now

The system is stable for now, but not in long-term fiscal balance, the ICI says. And broad awareness of that fact is behind a long argument about proposals that could close the gap between Social Security’s long-term obligations and its expected flow of tax revenue.

Conservative critics like Forbes contributor Jamie Hopkins say one target could be clamping down on strategies to maximize Social Security benefits by workers who file for benefits when they are 66, allowing their spouses to receive spousal benefits, but suspend collecting their own benefits until they are 70, which increases future payouts by as much as 8%. (For more, see this video: When Should My Spouse and I Take Our Benefits.)

Bridging the Gap

The more-liberal National Academy of Social Insurance says public-opinion polls it commissioned show that Americans favors closing most of the Social Security financing gap by raising payroll taxes that are now about 6.2% of income, paid by each of the worker and the employer, to around 7.2%, and by eliminating the cap on income subject to Social Security taxes.

The higher tax would cost an average worker about 50 cents a week, and only about 6% of workers make more than the income cap now, the group said. The tax hike would allow a change in cost-of-living adjustments to give greater weight to health-care inflation, which historically is higher than the general inflation rate Social Security relies on now. (For more, see: 4 Unusual Ways to Boost Social Security Benefits.)

Social Security benefits amounted to 5% of gross domestic product in 2012, according to the academy. By 2035, when the youngest baby boomers will have turned 70, Social Security benefits are projected to be 6.2% of GDP, the academy reports. That gain, for all the political controversy it inspires, is less than half as large as the surge in education spending when Baby Boomers were children, the academy says.

The Bottom Line

Benefits will rise incrementally in 2015 just as Social Security benefits become increasingly vital to retirement budgets. Meanwhile, how to handle the long-term fiscal imbalance of Social Security is still being debated. (For more, see: Delaying Social Security Can Add Up.)