The notion of struggling financially during retirement is hardly a foreign one, and it's no doubt a concern among workers today. But the best way to avoid financial stress later in life is to plan appropriately, and part of that involves understanding the role Social Security will play during your senior years.

New data from Wells Fargo indicates that younger workers don't seem to have a lot of faith in Social Security. Only 13% of millennials and 16% of Gen Zers expect it to be their primary means of paying retirement expenses, compared to 41% of baby boomers and 64% of current retirees. And while that sentiment among younger workers may seem negative, it's actually healthy and spot on.

Group of young men and women at a restaurant


Don't bank too heavily on Social Security

Many workers make the mistake of thinking they can sit back, save nothing, and rely on Social Security to pay the bills in retirement. In reality, Social Security, at present, will only replace about 40% of the average earner's pre-retirement income. That's a problem, because most seniors need roughly twice that amount to live comfortably without having to make drastic lifestyle changes.

To make matters a lot worse, Social Security is facing a potential funding shortfall that, if left unaddressed, could result in an across-the-board cut in retirement benefits. As of now, recipients are looking at a possible 20% reduction in benefits as early as 2035, as per the latest Social Security Trustees Report. If that happens, those benefits will do an even poorer job of allowing seniors to keep up with their living expenses.

And that's precisely why younger workers have the right idea with regard to Social Security. Though those benefits should be around in some capacity once today's 20-something and 30-something workers retire, they won't be enough to live on.

Save while you can

If you're expecting Social Security to pick up the bulk of your retirement tab, consider this your wakeup call that that's unlikely to happen. A better bet? Save independently in an IRA or 401(k) while you can. The younger you are, the less money you'll need to contribute on a monthly basis to build a strong nest egg, because you'll have years to capitalize on investment growth in your account.

Check out the following table for a deeper dive:

Save This Amount Per Month...

Beginning at This Age...

And You'll Have This Much Money for Retirement by Age 65 (Assuming a 7% Average Annual Return)











As you can see, if you start funding your nest egg at age 25 with $250 a month and do so for 40 years, you'll retire with close to $600,000. Wait 10 years, and you'll need to more than double your monthly contributions to achieve a similar ending balance. And if you wait 20 years, you'll need to contribute about five times as much on a monthly basis. That's why saving from a young age is crucial, and the fact that millennials and Gen Zers aren't counting so much on Social Security will hopefully serve as strong motivation to ramp up contributions on the IRA or 401(k) front.

Of course, if you're already older, you don't have the same time-based advantage, but that doesn't mean all is lost. You can still fund your retirement plan to the best of your ability. Also, look at extending your career to buy yourself a few extra years to save.

Though there's no need to write off Social Security completely as far as your retirement is concerned, you should have a solid idea of the role it will play down the line. And with any luck, that reality check will inspire you to fund your nest egg aggressively so you don't have to worry about money when you're older.