(MONEY Magazine) – Social Security as you know it is about to disappear. In its place will likely be a federal retirement system that forces today's workers to save more on their own and that pays out smaller benefits. Most dramatically, a portion of the tax dollars now flowing into the $496 billion Social Security Trust Fund will probably be invested in the stock market rather than in ultrasafe government securities, as is the case today. Neither major presidential candidate would dare admit before the election that he would seriously tinker with Social Security, though President Clinton told MONEY in an exclusive interview last August that he favors a bipartisan commission to reform Social Security and "would be prepared to go a long way to support the recommendations of such a commission." Dole too voiced support for a bipartisan commission during the debates. Yet even now, the incoming 105th Congress is preparing to move: Legislators from both parties pledge to advance at least six major Social Security reform proposals. Says Sen. Bob Kerrey (D-Neb.), a staunch advocate of federal entitlement reform: "The time to change Social Security is now."

Clearly, this is the time to make your voice heard in Washington, before politicians start taking significant action. To do that, read our descriptions below of the five leading options for reform. Then let us know which changes you favor by submitting the questionnaire on page 99. We'll report on your responses in an upcoming issue and pass on the results to key figures in Congress and the Administration.

But first, a little background. According to a 1996 report of the Social Security Trustees, starting in just 16 years--2012--the taxes paid into Social Security will no longer cover the benefits going out, as millions of baby boomers begin retiring. So taxes would have to rise, Social Security benefits would have to be cut, or the government would need to borrow more money in order for the trustees to redeem the government securities that the trust fund is invested in--expected to be valued at some $2.3 trillion by then. That surplus is now held in U.S. Treasury securities, which historically yield 5% on average.

A growing band of reformers, however, are pushing for what until recently would have been considered a truly radical change in the system: partial privatization. They say that a portion of the payroll taxes that currently fund Social Security should be invested in the stock and bond markets to pay today's workers a presumably better rate of return. (Historically, stocks have returned an average of about 10% a year.) The idea is gaining momentum: In a July telephone survey of 1,000 adults, released jointly by the nonprofit Employee Benefit Research Institute, the American Savings Education Council and Mathew Greenwald & Associates market research firm, 64% of workers and 40% of retirees said they favor letting individuals have a say in how some of the money they now pay in Social Security payroll taxes is invested, even if that means lower benefits. Indeed, the key issue that held up Clinton's 13-member Advisory Council on Social Security--the council was hoping to issue its recommendations around Thanksgiving--was not whether a portion of Social Security should be invested in the stock market but how much to privatize and whom to entrust with the investing decisions.

To alleviate the concern that people with little or no experience in the markets would make bad investing decisions, some privatizers believe that individuals should be restricted to a limited array of stock and bond funds. Some of those would be index funds, a basket of stocks or bonds that holds shares reflecting the overall market. This way individuals wouldn't need to worry about choosing the wrong stocks at the wrong time. Of course if the market tanked, the whole basket would be whacked and you might not earn the returns you need to have a comfortable retirement.

How should Social Security be fixed? Here are the five major options, starting with the most sweeping changes and concluding with the plan that comes closest to leaving the current system intact. Now you be the judge.

--Personal Security Accounts (PSAs). Under this plan, promoted by five members of the advisory council, your 6.2% share of the Social Security payroll tax would shrink to 1.2% and you'd invest the difference in a Personal Security Account, which you would open at a bank, brokerage, mutual fund or insurance company. You could invest that money in any broadly available financial asset, from blue-chip stocks to junk bonds. At age 62, you could start withdrawing your contributions plus their earnings, tax-free.

The trade-off: By the time today's younger workers retire--in 40 years or so--the government-guaranteed Social Security retirement benefit will have dwindled to a flat $410 a month in 1996 dollars, adjusted upward each year to reflect annual wage growth. By comparison, the average Social Security benefit for a 65-year-old this year is $724 a month; the maximum benefit is $1,248 a month. Furthermore, the government benefit would be fully taxable. (Today, married couples with joint incomes of $32,000 or less and singles making $25,000 or less pay no tax on their benefit; up to half of benefits are taxable for married couples who earn $32,000 to $44,000 and for singles with incomes of $25,000 to $34,000; over those limits, retirees are subject to tax on up to 85% of their benefit.) Finally, under the PSA plan, the age at which you would be eligible for a full government benefit would spike up to 68 in 2017 and then rise by one month every other year thereafter. Under current law, the full retirement age increases from 65 to 66 by 2009 and to 67 by 2027.

During the transition from the present system to this one, however, current retirees and people 55 and older would not be part of the new system; they'd keep playing under today's Social Security rules. Workers ages 25 to 54 would receive a transition benefit when they retire based on how much they had previously earned while employed and how many years they had paid Social Security taxes, plus a prorated share of the flat monthly benefit. Those under 25 when PSAs are enacted would simply forfeit any benefit based on their previous work history.

Biggest flaws. To cover the multitrillion-dollar tab of switching from the current scheme to a PSA-based system, advocates propose an immediate payroll-tax hike of 1.52%, split evenly at 0.76% apiece between you and your employer and lasting for 70 years. According to Bruce Schobel, a former Social Security actuary and now a vice president at New York Life in New York City, the tax hike would cost a 40-year-old worker with average earnings and 5% annual wage growth $7,632 by age 62. (A 22-year-old average worker would pay an additional $23,902 in payroll taxes over 40 years.) You could also wind up paying the employer's 0.76% share of the new payroll tax in the form of lower wages and higher prices. What's more, the government would have to borrow an extra $646 billion by the year 2034 to finance this plan.

--Personal Investment Plans (PIPs). Sen. Kerrey and retiring Sen. Alan Simpson (R-Wyo.) call for privatization on a smaller scale. Just two percentage points a year of your 6.2% share of the payroll tax--about $500 for today's average worker--would be diverted into what they call Personal Investment Plans (PIPs). You could put that cash into either an Individual Retirement Account invested virtually any way you choose or in a selection of three funds: a stock index fund, a bond index fund and a Treasury securities fund. To help keep Social Security solvent for the long term, the Kerrey-Simpson plan would aim for higher returns than the trust fund now earns by gradually investing 25% of the trust fund in stocks--specifically a stock index fund.

Some other changes would be needed to balance Social Security payouts with revenues, though. For example, the retirement age for full benefits would rise to 70 by 2037 and thereafter be indexed to anticipated increases in life expectancy. In addition, the formula used for computing benefits would then be tweaked so that future government benefits for high earners would be less generous than they are today.

Biggest flaw. This plan would slice the annual cost-of-living adjustment (COLA) on Social Security benefits for current and future retirees. Under present law, retirement benefits increase each year by an amount based on the rise in the previous year's consumer price index (CPI). Under PIPs, the COLAs would generally be set at the CPI minus 0.5%. By taking some of the fizz out of COLAs, this plan asks current retirees to pay dearly for the transition to a new system.

For example, if COLAs were set at the CPI minus 0.5% today, a 65-year-old couple going on Social Security next year and collecting the maximum combined benefit of $31,824 would forfeit getting a steep $10,680 in benefits over 10 years. Moreover, since COLA cuts compound over time, "The longer you live, the worse off you'd be," says Sylvester Schieber, a vice president for research at Watson Wyatt Worldwide, a pension consulting firm in Washington, D.C. and an advisory council member backing PSAs.

--Individual Accounts (IAs). Under this approach, championed by two council members including chairman Edward Gramlich, dean of the University of Michigan's School of Public Policy, you would keep paying your 6.2% share of the Social Security payroll tax. In addition, the government would require you to fund an Individual Account with an amount equal to 1.6% of your Social Security-covered earnings. Your IA investment options would be limited to five to 10 broadly diversified, tax-deferred stock and bond funds offered through the Social Security Administration, ranging from aggressive to conservative, and including some index funds. When you retire, the government would pay out your IA stash over your life expectancy and add this monthly annuity check to your Social Security benefit. Your annuity payment would be tax-free. Proponents of the IA approach say that by limiting the investment options and annuitizing the payouts, the government would help mitigate the risk that individuals might make inappropriate investments or outlive their stash.

To ensure that the Social Security revenues coming in would be sufficient to cover payouts promised for the next 75 years, your government benefits would be cut in three ways: The retirement age for full benefits would rise to 67 by 2011 (indexed to life expectancy thereafter), high earners would get smaller checks than they do today, and all retirees would be subject to tax on as much as approximately 85% of their benefits. (Currently, only couples who earn more than $44,000 and singles making more than $34,000 owe tax on as much as 85% of their benefits.)

Biggest flaw. Critics claim that the mandatory 1.6% IA contribution is simply a tax hike in disguise, raising the hit on your paycheck from 6.2% to 7.8%--a 26% increase. True, critics concede, unlike a tax, the money would go into your Individual Account and you could just reduce your other savings by the amount you need to fund your IA.

--Maintain Benefits (MB) Plan. Backed by a six-member plurality of the advisory council, including its three labor representatives and former Social Security commissioner Robert Ball, MB would invest as much as 40% of the trust fund in a stock index fund. By doing so, that portion of the fund would presumably enjoy a revenue boost that would let the government provide roughly the same level of benefits over the next 75 years as promised under current law.

Even with the presumed bump in trust fund revenues, however, the MB plan relies on a few tax hikes and benefit cuts. Chief among them: subjecting as much as 85% or so of all retirees' benefits to tax and, in 2045, increasing the payroll tax by 1.6 percentage points, to 14%, split evenly between you and your employer.

Biggest flaw. Some skeptics think the government would bristle at investing Social Security money in an index fund. "Could the government reconcile an investment in tobacco companies--which stock index funds hold--with its attempts to regulate the tobacco industry?" asks John L. Steffens, executive vice president at Merrill Lynch in New York City. Critics fear that if politicians objected to investing in index funds, they would find ways to direct the dollars toward favored industries.

Raise taxes and cut benefits. According to Robert Myers, the chief actuary of Social Security from 1947 to 1970 and one of the current system's staunchest supporters, the program could be kept largely intact with the following changes: Raise payroll taxes by three-tenths of one percentage point on both the employer and the employee starting in 2015 and raise them again by the same amount in 2020, 2025 and 2030; and cut benefits by extending the retirement age to 70 by 2037.

Biggest flaw. Some Social Security analysts believe that the public will not accept a payroll-tax hike that simply preserves the status quo. Moreover, they say, any successful attempt at reform would have to respond to the public's apparent demand for a private savings component. "At this point, it certainly seems like private savings will be a part of Social Security in the future," says New York Life's Schobel, "not because that's necessarily a better way to fund retirement security but because people seem to want it. This is a democracy, after all."

Now, in just that spirit of democracy, cast your vote.