Some people are of the impression that Social Security is going away. The program is facing some pretty big financial challenges that could result in benefit cuts.

However, at this point, the worst-case scenario has Social Security reducing benefits to the tune of about 20% from what it's scheduled to pay. The program's Trustees are not sounding warnings about Social Security disappearing completely, so that's good news for current and future retirees alike.

But while it's important to recognize that Social Security is not at risk of going away, it's also important to have realistic expectations when it comes to the benefits you're in line for. And if you overestimate the amount of income Social Security will provide you with, it might lead to a world of financial stress once your retirement rolls around.

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Know what to expect from Social Security

If you earn an average wage, you can expect your monthly Social Security benefits to replace about 40% of your income if cuts don't come down the pike. If Social Security does have to slash benefits, you'll get even less replacement income.

Why is this important to know? As a general rule of thumb, seniors tend to need 70% to 80% of their former earnings to live comfortably in retirement. There are, of course, exceptions to this rule on both ends. Some seniors can get by on much less than 70% to 80% of their former paychecks, while other retirees inevitably end up needing more.

But it's a good idea to stick to that guideline in the course of your retirement planning. And it's also essential that you realize that even if Social Security isn't forced to cut benefits, you shouldn't depend on it for more than half of your retirement income. As such, you'll need to save diligently or come up with another game plan to help ensure that you're able to cover your expenses once your career wraps up.

Now if it's not feasible for you to save much for retirement -- say, you're a lower earner or you have a lot of expenses you can't avoid -- then you may want to plan on working part-time as a senior to generate income. But otherwise, you should aim to sock away money consistently for retirement so you're not forced to cut corners in a major way once your time in the workforce ends.

Are benefit cuts inevitable?

Social Security isn't necessarily doomed to benefit cuts. But unless lawmakers find a way to address the program's financial issues -- and soon -- the program might have to reduce benefits universally.

Now benefit cuts may be avoidable via other changes to Social Security. Raising full retirement age from 67 to 68 or 69 for anyone born in 1960 or later could help the program conserve cash and potentially avoid benefit cuts to some degree. And that's just one proposal that's been floated by lawmakers.

The point, however, is that for Social Security to avoid benefit cuts, some changes to the program are likely to be necessary. Keep tabs on those in case they end up impacting your retirement.