Though many working Americans look forward to retirement, it's hard to ignore the fact that it's a potentially worrying period of life to deal with. The loss of a full-time paycheck, coupled with rising costs, can make for a precarious financial situation, even among those who save diligently for retirement in advance.

But new data from Nationwide helps shed light on why so many future retirees are worried about their golden years. In a recent survey, 31% of workers aged 50 and older say that the idea of Social Security running out of funds is a huge source of retirement stress for them.

If you're concerned about Social Security's future, here's some good news: The program is not going bankrupt. Not even close. But even with that being the case, Social Security should only play a limited role in your retirement. And if you rely too heavily on it, you'll be sorry after the fact.

Older man with serious expression leaning against yellow wall

Image source: Getty Images.

Don't bank too heavily on Social Security

At present, Social Security expects its trust funds to be depleted in 2035, and once that happens, the program may have no choice but to start cutting retirement benefits to the tune of 20%. But that's a far cry from Social Security not having funds at all.

Because the program is funded primarily by payroll taxes, it can survive without its trust fund. And remember, the program also taxes benefits that are paid to retirees with moderate incomes or higher, so that's a revenue source, too.

Still, it's best to not put a lot of faith in Social Security, and here's why: If you're an average earner, those benefits will replace about 40% of your pre-retirement income, assuming no future cuts. Most seniors, however, need roughly double that amount to keep up with their bills, especially when we account for inflation and rising healthcare costs. As such, it's important to enter retirement with a healthy level of savings, and if you're in your 50s without much of a nest egg, it's imperative that you get moving in that regard.

The good news is that once you turn 50, you get the option to contribute more to a tax-advantaged retirement savings plan than your younger counterparts. In 2020, workers 50 and over can sock away up to $26,000 in a 401(k), and up to $7,000 in an IRA. For workers under 50, annual contributions will max out at $19,500 and $6,000, respectively.

Of course, if you're not used to saving much for your golden years, you're apt to have a difficult time suddenly maxing out a 401(k). But if you manage to max out an IRA at the current limit, which is far more feasible, and you do so over a 15-year period, you'll wind up with $176,000 in savings if your investments generate a 7% average annual return during that time, which is reasonable when you load up on stocks. Meanwhile, if you're willing to extend your career and can therefore save $7,000 annually for 20 years, you'll wind up with $287,000, assuming that same 7% return.

Delaying retirement should, in theory, also make it feasible for you to hold off claiming your Social Security benefits past full retirement age, thereby boosting them in the process. And that's a good way to eke out a little more income from the program.

There's lots to worry about when it comes to retirement, but the notion of Social Security completely going away shouldn't top your list. Remember, those benefits should only represent a small portion of your senior income anyway, and if you stick to that rule and save enough to uphold it, you won't have to lose much sleep over a program that's been plagued with financial issues for a very long time.