I'm still a few years away from retirement, but I've been thinking a lot about whether Social Security alone will actually cut it. Honestly, I don't think it will, and here's my situation.

Most people don't realize that Social Security was literally designed to replace only about 40% of your pre-retirement income. That's it. Yet around 24 million Americans over 65 rely on it for at least half their retirement income. I really don't want to be in that group when my time comes.

The bigger issue I keep coming back to is whether Social Security cost of living adjustments can even keep pace with real inflation. The Social Security Administration uses something called the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) to calculate annual COLAs. The problem? This metric wasn't designed with retirees in mind. It doesn't weight healthcare costs heavily enough, and healthcare makes up a way bigger chunk of what retirees actually spend money on compared to younger people. So over time, the buying power of your Social Security check just slowly erodes.

There's also this looming deadline nobody likes to talk about. If nothing changes, the Social Security trust funds are projected to run dry by the end of 2032. I know that doesn't mean benefits completely disappear, but it could trigger an automatic 24% cut. Maybe Congress will fix this before then. Maybe they won't. Either way, I'm not betting my entire retirement on hope.

So what have I actually done? Years ago I started maxing out contributions to my 401(k) and always made sure to grab the full employer match. Once I went independent, I set up a solo 401(k) to keep contributing. My wife and I have also been consistent with Roth IRA contributions. More recently, I've shifted toward dividend-paying stocks as retirement gets closer.

Yes, Social Security will still be part of my retirement income plan. But it's going to be just one piece of the puzzle, not the whole thing. The cost of living keeps rising, and Social Security cost of living adjustments just haven't historically kept up well enough. Building multiple income streams now means I won't have to stress about it later.