5 Retirement Risks and How to Handle Them

[See 8 Tips for Paying for Health Care in Retirement.]

Long-term care is pricey. A private room in a nursing home currently costs a median price of $74,208 annually, or about $203 a day, according to a recent survey by long-term care insurance company Genworth Financial. Slightly more affordable long-term care options include home health aid services, which run about $31 an hour, or an assisted living facility, which typically costs $33,903 annually, not including entrance fees. The most affordable option, adult day health care, costs a median price of $54 a day. Long-term care insurance protects against some of these costs, but policies are prohibitively expensive for many people and generally have a considerable amount of fine print involved. Before you buy, check up on the financial health of the company and find out how to cancel and renew the policy, what happens if you stop paying the premiums, and what needs to happen before you can begin using your benefits.

Unexpected Retirement. Retirement often happens while you're making other plans. About 47 percent of current retirees say they retired sooner than they originally planned to, according to a recent Employee Benefit Research Institute survey. A layoff or health problem can easily force retirement plans off track. By age 40, most people have already had one or more sudden events shock their finances, including job loss (18 percent), divorce (29 percent), the death of a spouse or life partner (10 percent), a serious illness or long-term disability (24 percent), or the illness or disability of a child (7 percent), according to a survey of 1,200 adults between ages 40 and 79 by AARP Financial and Boston Research Group. Only about 43 percent of those surveyed made it to middle age or older unscathed. "It's easier to work an extra year or two than to try to get back into the work force after you have been out," says Miccolis. "If you do retire, try to keep some options open like working for a consulting company as needed." While you are still working, develop a succession plan in case you are suddenly retired. Disability and life insurance can help protect against sudden health problems. And, at any age, keep an eye on the job market in case you should suddenly find yourself back in it. A polished resume listing up-to-date skills could still come in handy, even during the traditional retirement years. Check out these seven tips for finding a new job after age 50.