60% of Workers Today Worry About Reduced Social Security Benefits. Here's How Likely They Are

An ideal retirement, financially speaking, is generally one where you have multiple income streams at your disposal. Yet many Americans reach retirement age without money saved and without an income source to fall back on other than Social Security.

The average retired worker on Social Security collects about $2,000 a month today. That should tell you that living on Social Security alone is far from ideal.

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

Image source: Getty Images.

Making matters worse is that there's a possibility Social Security will have to cut benefits down the line. It's something that understandably has many workers today worried.

How nervous should you be about Social Security cuts?

In the coming years, Social Security expects to owe more money in benefits than it collects in revenue, thanks to a shrinking workforce. Social Security can use the money in its trust funds to keep up with benefits for a good number of years. But once those trust funds are emptied, benefit cuts will be on the table.

It's not surprising, then, that 60% of workers today worry about some type of change that might reduce their Social Security income in retirement, according to a recent survey by the Employee Benefit Research Institute. The problem is, it's hard to know how worried workers should really be.

On the one hand, it's fair to assume that lawmakers will do everything in their power to avoid Social Security cuts, as that would likely spur a massive poverty crisis among older Americans. On the other hand, there may be limits to what lawmakers can do to prevent benefits from being broadly reduced. So it's best to assume that Social Security will be cutting benefits, even if that doesn't end up being the case.

How to plan for Social Security cuts

Your best line of defense against Social Security cuts is having other income to fall back on in retirement. In that regard, you have options.

First, saving consistently could help you build up a nice nest egg, especially if you give your money ample time to grow. If you contribute $500 a month to a 401(k) or IRA over a 30-year period and earn an 8% return during that time, which is a bit below the stock market's average, you could end up with about $680,000.

There's also the option to work part-time in retirement, whether at a traditional job or a freelance one. In addition to providing you with money, a job might serve the very important purpose of giving you something to do with your time.

You may also be able to generate income creatively in retirement, such as by renting out a room in your home. The key is to make sure you have access to money outside of Social Security in case benefit cuts happen.

Another way to protect yourself? Plan to delay Social Security. For each year you wait past full retirement age, your benefits grow 8%, up until you turn 70.

If you delay Social Security and benefits are cut, you'll be starting off with a larger monthly paycheck to begin with. That could help soften the effect of any reduction that arrives.

The $23,760 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.

One easy trick could pay you as much as $23,760 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. Join Stock Advisor to learn more about these strategies.

View the "Social Security secrets" »

The Motley Fool has a disclosure policy.