Okay, folks. It’s time to get serious about Social Security.

I don’t like to be the person who sounds alarms and causes unnecessary panic. But the reality is that we’re creeping closer to Social Security’s financial breaking point. And while the program isn’t at risk of going away completely, benefit cuts are a big possibility.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Here’s the backstory. Social Security gets the bulk of its funding from payroll taxes. But in the coming years, that revenue stream is expected to shrink as baby boomers stage a mass exodus from the workforce.

Image source: Getty Images.

And yes, it’s a much-deserved one. But it’s going to cause big problems for Social Security, not only because of a reduction in payroll tax revenue, but also, because the older Americans who leave their jobs in the coming years will no doubt be filing Social Security claims in short order, thereby straining the program tremendously.

Thankfully, Social Security has trust funds it can use to keep up with benefits for a period of time. But once those trust funds are emptied, Social Security may have no choice but to cut benefits. And if you’re wondering when the program’s trust funds are set to run dry, the Social Security Trustees say it could happen as early as 2035.

That’s why it’s so important to have a backup plan in case Social Security gets cut. And mine is a pretty simple one that might work for you, too.

Don’t rely too much on Social Security

I want to be clear about one thing. This isn’t the first time in Social Security’s history that the program has faced the possibility of benefit cuts.

In the past, lawmakers have managed to avoid them. But there’s no guarantee they’ll be able to prevent cuts this time around.

That’s why I’m doing my best to save more for retirement. And when I say “save more,” I mean save beyond the 15% to 20% threshold most financial experts recommend.

This doesn’t mean that I’m going to the extreme of saving half of my salary. Sure, it would be nice to do that, but between my kids, my dogs, and my mortgage, it’s not in the cards.

But what I typically do each year is set a goal of saving 25% of my income for retirement at a minimum. And if I can go beyond that, even better.

Saving at that level means having to make sacrifices in other areas of my life. I don’t have nearly as much downtime as I’d like because I tend to work long hours for extra pay. And I don’t have the closet space I’d like to have because instead of upgrading to a larger house, I’m prioritizing retirement savings instead.

But I’m doing all of this because I know that Social Security just isn’t a reliable source of retirement income for me given the potential for cuts. And I don’t want to risk a scenario where I don’t have enough money to be comfortable later on.

Start slowly and work your way up

When I was in my 20s, I wasn’t saving 25% of my income for retirement. Between my student loans and other expenses, I just couldn’t make it happen. And in my early 30s, child care costs ate up so much of my income and limited my working hours so that I was barely able to save, period.

Now that I’m older (I won’t say how much older, but let’s just leave it at “older”), I’m in a place where I can save more. And you might find that you’re able to gradually increase your savings year after year until you’re at a point where socking away 25% of your salary is doable.

Until then, go slowly. Save an extra $50 a month if that’s all you can afford. Or, try banking your raise at the start of each year. Even though we’re well into February, it may not be too late to largely do that for 2025.

I’m not going to sit here and insist that Social Security cuts are coming. There’s a good chance lawmakers will manage to prevent them.

But there’s also a good chance that benefits will be slashed to the tune of 20% or more down the line. Since nobody knows which scenario is in store, it’s best to save as well as you can so that if those cuts do arrive, they won’t end up wrecking your retirement.

The $22,924 Social Security bonus most retirees completely overlook

If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

View the “Social Security secrets” »

The Motley Fool has a disclosure policy.