A program as important as Social Security is apt to work its way into the news somewhat often. And sometimes, that news just isn’t positive.

Social Security has been in the news a lot lately in the context of procedure changes and potential office closures. But current events aside, the program’s financial situation is often talked about, simply because it’s pretty dire.

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In the coming years, Social Security expects its financial obligations to exceed the revenue it’s able to bring in. This will put pressure on the program’s limited trust funds and force Social Security to dip in to them to cover benefit payments.

Once Social Security’s trust funds run out, the program may have no choice but to start cutting benefits. And that’s not ideal.

Still, there’s a lot of talk about Social Security going broke. And it’s important to recognize that benefit cuts are not at all the same thing as the program running out of money completely.

But you might actually want to tell yourself that Social Security is going broke — not because that’s true, but because it might motivate you to get more serious about building retirement savings.

Why Social Security isn’t a great fallback option

If Social Security cuts benefits, monthly payments could be reduced by about 20%. But even if benefit cuts don’t happen, there’s only so much money Social Security will pay you every month.

Many seniors make the mistake of trying to live mostly on Social Security. And that’s not a trap you want to fall into.

Even without cuts, those benefits probably won’t replace more than 40% of the salary you’re used to making. And while some of your expenses could decline in retirement, you might have a very difficult time getting by on a 60% pay cut, even with a pared-down lifestyle.

So if you’ve been neglecting your long-term savings, you may want to pretend that Social Security is, indeed, running out of money. That should light a fire in you to start pumping more money in your 401(k) or IRA.

Small savings contributions can add up over time

A big reason so many retirees wind up heavily reliant on Social Security is that it’s not an easy thing to build savings. But with a long savings window, you can turn a bunch of smaller retirement plan contributions into a lot of money.

Say you’re only able to contribute $250 a month to your retirement savings, but you do over a 35-year period. If your portfolio delivers an 8% yearly return, which is a bit below the stock market’s average, you’ll end up with a little more than $500,000.

There’s no need to stress about Social Security disappearing, despite the things you might read. But it’s also not a bad idea to tell yourself that the program is going broke if that’s what it takes to push yourself on the savings front. And the more money you save, the less you’ll have to worry about Social Security benefit cuts if those become a reality.

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