I've reached a point where retirement is not a faraway dream, but rather a reality less than 10 years away. That's making me revisit many aspects of my retirement plan as I try to ensure that I'll have the income I'll need.

Part of my retirement income will come from Social Security, which helps support tens of millions of retirees in the United States. But Social Security will never provide all my income. Here are three reasons why.

Someone smiling at the camera.

Image source: Getty Images.

1. Social Security alone is rarely sufficient

For starters, Social Security income is not quite as generous as you might think. As of November, the average monthly retirement benefit was $1,845 -- or only about $22,000 per year.

Sure, lots of people collect more than that, but lots more collect even less. And the maximum benefit, which is attainable by only a few people, is $4,873 per month, or about $58,500 for the year. That's a lot more, but most of us would probably want more than that in annual retirement income.

For an estimate of how much you can expect based on your earnings history, set up a my Social Security account at the Social Security Administration (SSA) website.

I'm far from qualifying for that maximum $58,500, and I'm aiming for more than that in total income, too, so I clearly need additional plans.

Here's an eye-opening exercise: Make a list of all your expenses (current and anticipated) in retirement. It can give you a rough idea of the income you'll want or need in the future.

Then look at your current savings and investments. Do you seem on track to have what you'll need, or do you need to save and invest for retirement more aggressively?

2. Social Security benefits could shrink in the future

Here's another reason I'm not relying solely on Social Security: The program is facing a looming shortfall, and if nothing is done, it won't be able to pay out all it owes to retirees.

Don't freak out, because it's in the power of those in Washington to shore up the program, and they may well do so in order to keep their constituents happy.

But in the meantime, Social Security's trustees noted in their 2023 report: "The Old-Age and Survivors Insurance (OASI) Trust Fund will be able to pay 100% of total scheduled benefits until 2033, one year earlier than reported last year. At that time, the fund's reserves will become depleted... ."

In other words, Social Security will operate as normal until 2033. But then, there will only be sufficient funds to cover 77% of benefits. So if this happens, beneficiaries will likely get shrunken checks.

And that's another reason I'm not fully relying on Social Security. I'm hoping for the best, but planning for the worst.

3. It's smart to have multiple income streams

Lastly, I'm a big believer in the value of having multiple income streams in retirement, if at all possible. Ideally, for example, I'll have:

If you have multiple income streams, too, they might look different from mine. For example, there might be pension income and/or income from rental properties. If you're married, your spouse might have various income streams as well.

Having multiple income streams means that if one of them dries up, you'll still have the others. For example:

  • Social Security might shrink the benefits it pays.
  • Your stock portfolio could take a big hit if there's a market crash.
  • Interest rates might fall to very low levels, shrinking some or all of your interest income.
  • The insurance company you buy an annuity from could turn insolvent. (That's why you should only buy from insurers with high ratings and why you might buy several smaller annuities from several insurers instead of one big one from a single company.)

So as you plan for your retirement, consider setting up multiple income streams -- and think twice before assuming that Social Security will be sufficient.