Is 1 Income Stream Enough for Retirement? What Seniors Need to Know.

So you're starting to plan for retirement, and you're wondering whether you can get by on just one income stream. Let's see how that might work for you. Much will depend on which income stream it is. Below are some possibilities.

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Social Security: Most of us will not survive solely on Social Security benefits, because they're not that generous. As of March, the average monthly retirement benefit was $2,079 -- or about $25,000 per year. If you earned more than average, you'll collect more than average -- but not that much more. Also, Social Security's surplus has been running out. More money is being paid out than is coming in, and the surplus is expected to run dry in a few years.

Annuity income: Fixed annuities are great, delivering fairly reliable income for as long as you specified or even for the rest of your life. But they're only as reliable as the insurance company you bought them from. You can reduce your risk by spreading your annuity purchase across several highly rated insurers.

Dividend income: I'm a big fan of dividend-paying stocks and have a bunch in my portfolio. Having an assortment of different dividend payers means I'll still get a flow of income if one of them flames out. But what if there's a big stock market crash? And what if it lasts for a long time? At such times, many companies might reduce or suspend their dividends.

Rental property income: If you own some properties, you might rent them out and collect plenty of income for retirement. But keep in mind that you'll still be on the hook for maintenance and repairs, property taxes, insurance, and more. Dealing with tenants can be a headache, and all of it can become more than you want to deal with when you're a lot older.

Multiple streams for the win!

It seems to me (and others) that a smart approach is to set up multiple income streams for your future years. That way, if one disappoints you, you can rely on the others. Here's just one example of how this could look:

Note that Social Security features nearly annual cost-of-living adjustments that can help you keep up with inflation, and dividends from healthy and growing companies tend to be increased rather regularly, too. Some annuities will let you add annual increases (for a price), as well. The more you're prepared to deal with inflation, the better.

If you don't yet have a solid retirement plan in place, start working on one. It can make a huge difference to your future financial security.

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