If you're like most Americans, chances are good that Social Security plays a key role in your retirement plans. And you're right to expect at least some income from the popular entitlement program, although it can't be your sole source of retirement funds.

Unfortunately, if you're hoping to get the full amount of your promised benefits, you may be in for an unpleasant surprise.

In fact, the Committee for a Responsible Federal Budget has highlighted four pieces of really bad news about Social Security that should prompt you to reconsider how much you can rely on receiving -- and hopefully encourage you to increase your retirement savings so you're prepared if your benefits aren't all you were hoping for. 

Broken piggy bank with coins spilling out.

Image source: Getty Images.

1. Social Security's trust funds will run out of money in 15 years

Social Security's current financial trajectory isn't a good one. In fact, the program's financial reserves are expected to be depleted within just 15 years. As the Committee for a Responsible Federal Budget points out, that means today's 52-year-olds will just be reaching full retirement age while the youngest retirees today will be hitting their 77th birthdays. 

Retirees won't see their benefits stop once the trust funds are empty -- but they will face benefit cuts. In fact, all Social Security beneficiaries will see an across-the-board cut of 21%, which will grow to as high as 27%. That's just not sustainable for millions of Americans who already struggle to get by on the minimal benefits they're receiving.  

2. Social Security faces rising imbalances

The Social Security Trustees indicated before the pandemic that Social Security would run deficits topping $2 trillion in the next 10 years. That's about the equivalent of .7% of the country's gross domestic product (GDP) and around 2% of the country's total payroll. 

As bad as that sounds, the deficit is only going to get worse. By 2040, the deficits are expected to equal 3.5% of payroll and 1.2% of GDP. And by 2094, the deficit will equal a whopping 4.5% of payroll and 1.5% of the country's gross domestic product. 

These are big numbers and it won't be easy to make up the shortfall. Yes, the government could raise the payroll tax to cover the deficit, but taking such a huge additional amount of money from people's paychecks isn't likely to be popular or politically easy. 

3. The program's financial situation is getting progressively worse

As the Committee for a Responsible Budget explained, Social Security's actuarial deficit is growing shockingly fast. The actuarial deficit is the difference between the income rate of Social Security and the obligations the program has committed to over the next 75 years. 

In the years between 2010 and 2019, there was close to a 50% increase in the actuarial deficit. And in the last year alone, there was an additional 15% increase. Sadly, COVID-19 is expected to make the shortfall grow even more substantially. 

4. Time is running out to save Social Security

With no more than 15 years left until the program's coffers run dry, lawmakers don't have a lot of time to find a financial fix for Social Security. And unfortunately, the longer lawmakers wait, the harder it will be for two reasons.

First, the longer the delay before action is taken, the more taxes would have to go up or benefits would have to be cut since the trust fund will continue to be depleted in the interim. And second, if lawmakers wait to act, any changes may have to occur abruptly rather than being phased in over time to allow people to change their retirement plans. It's much more difficult to impose a sudden change on people who've made their retirement preparations based on getting their promised benefits.  

What should you do to prepare for a future with smaller Social Security benefits?

As you can see, future retirees have plenty to worry about when it comes to Social Security. With the program's finances in such poor shape, the smartest course of action is to prepare for the possibility of smaller Social Security checks. 

To do that, pre-retirees and even younger current retirees should make sure they have a nest egg that's generous enough to cover any shortfalls in their retirement benefits. Younger people who are still working may want to up their retirement savings goals, while both current workers and today's retirees need to ensure they're invested in a diverse mix of assets that exposes them to the right level of risk given their age. 

Investing in index funds that track the market, such as an S&P 500 index fund, can be one of the easiest ways to quickly diversify a portfolio for those who aren't sure how to pick stocks, but there are plenty of options to build the retirement nest egg you need so you don't over-rely on Social Security to your financial detriment.