HOW MUCH should older people worry about the future of Social Security? If you read the new report issued by the trustees of the Social Security system, you may be surprised to find that-- at least for the next 20 years or so--there is not much cause for alarm.

Would that the rest of the federal budget were in as good shape as Social Security, when you get right down to it. Under the same economic assumptions the administration uses to project the rest of the budget, Social Security is not in any trouble at all for the rest of the century. Whereas the rest of the budget, under this interpretation, shows enormous deficits, the combined retirement, disability and Medicare payroll taxes are sufficient to cover all Social Security outlays.

We don't think that the administration's economic forecast is a prudent basis for planning a system as important as Social Security, of course. But the fact that the system would be in balance under economic conditions that the administration finds plausible is at least a good indication that Social Security's short-term difficulties are not so severe as to warrant major retrenchments in benefits. This should relieve the concerns of the many elderly people who now fear that major, permanent cutbacks in benefits are in the offing.

On the other hand, since it is likely that economic conditions will not improve as sharply as the administration hopes, Congress needs to make corrections to ensure that the combined trust funds do not run temporarily dry--a prospect that could occur within the next two years. The sooner corrective measures are taken, the less harsh the adjustment needed to tide the retirement and disability funds over the next few years until surpluses are expected to reappear.

Congress also should start thinking about Medicare. Unlike the case with the other two funds, Medicare's financial difficulties will continue to worsen unless some way is found to stop hospital costs from growing at more than twice the rate of inflation. With a fast growing elderly population and ever more elaborate methods of diagnosis and treatment, curbing Medicare costs may require substantial changes in the medical care system. If people don't want to change the system, then the costs will have to be recognized and a consensus developed on how best to pay them.

The trustees' report is a useful reminder that Congress can't afford to dally in covering the likely near-term shortfall in the retirement and disability funds--or to begin exploring ways to get Medicare costs under control. But the report should not be used as an excuse for making sharp and permanent cutbacks in benefit payments in the hope that the resulting surpluses in the trust funds will offset deficits elsewhere in the budget. The Social Security tax is an unforgiving tax--it hits lower wage earners hardest and makes no allowance for special needs and circumstances. If more money is needed to invest in defense or to service the national debt, the progressive income tax is the right way to finance such expenditures.