Once you reach a certain point in your career, it may be possible to nail down a specific retirement age. And if you're 62 or later, you may be gearing up to retire in 2026 knowing that you're able to sign up for Social Security benefits.

But if you're going to move forward with retirement this year, it's important to make sure you have access to income outside of Social Security. Here's why retiring on those benefits alone is not smart at all.

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1. Social Security will only replace a limited portion of your paycheck

You might assume that Social Security is designed to take the place of your employer paycheck in its entirety. But if you earn an average wage, you can only expect Social Security to replace about 40% of it.

You may not need 100% of your current paycheck to cover your costs in retirement. In fact, it's common for seniors to do pretty well on 70% to 80% of their former earnings.

But living on 40% of your current income may be a tall order. And if you don't have income outside of Social Security, you may be forced to live a lot more frugally than you want to.

2. Social Security cuts are a possibility

Social Security gets most of its funding from payroll taxes. But in the coming years, that revenue stream is expected to decline as baby boomers retire in droves.

Social Security may have to cut benefits in less than a decade if lawmakers don't find a way to solve the program's cash crunch. If those cuts happen, Social Security might replace a lot less than 40% of your current paycheck, which is all the more reason to have some savings or other income streams to supplement those benefits.

3. Social Security's COLAs don't tend to hold up

Each year, Social Security benefits are eligible for a cost-of-living adjustment, or COLA. The purpose of those raises is to help ensure that seniors who collect benefits don't lose out on buying power due to inflation.

But because of a big flaw in the way Social Security COLAs are calculated, they tend to fail seniors in that regard. The Senior Citizens League, an advocacy group, found that Social Security recipients lost 20% of their buying power between 2010 and 2024 due to insufficient COLAs.

That's yet another reason not to retire on just Social Security. You need another income stream that could better keep up with inflation, whether it's an investment portfolio or a job where you may be eligible for annual raises.

Don't make a decision you'll regret

While there's nothing wrong with counting on Social Security for some of your retirement income, you don't want to be too reliant on it. So if you're thinking of retiring this year but don't have an obvious income source outside of those benefits, you may want to reconsider your plans.

Working a few more years could allow you to build some savings you can tap through retirement. It might also give you a chance to develop skills that allow you to keep working part-time in retirement, sparing you the financial strain that comes with only having Social Security to fall back on.