When you're nearing retirement, it's natural to focus on the fun stuff — the things you'll do with more time on your hands, not the unexpected issues that might arise. But comprehensive financial planning needs to prepare for all the possible retirement risks as well as the exciting plans.

Even though there's no way to know for sure what your retirement will bring, there are some common retirement risks that you should plan for. Here are three potential pitfalls you could encounter and what you can do to prepare for them.

Risk 1: Financial Issues

No matter how well you plan your retirement, you can't know the future. You can't know ahead of time how inflation will affect the buying power of your nest egg, nor can you predict exactly what the market or economy will do in the years leading up to your retirement or in the years that follow. A prolonged period of inflation could slowly eat away at your nest egg's value, or a sudden market downturn at the wrong time could take a bite out of it all at once.

It's important to be proactive with your money management to deal with financial issues. Inflation rates are typically between 1% and 3% per year, although they can be much higher or lower, depending on the state of the economy. Planning your retirement income with a 3% increase each year could mitigate inflation depleting your buying power — but it means you'll have to save more than you'd initially calculated.

Diversifying your investments can also help you shrug off market fluctuations without breaking a sweat. Keep a portion of your money in stable assets unlikely to be affected by market dips so you can afford to stay invested in the more volatile assets until they recover.

Risk 2: Outliving Your Savings

You're at risk of outliving your money in one of two ways: Either you didn't save enough of it, or you spent too much of it in the early years of your retirement.

Foresight and good retirement financial planning can prevent money woes from derailing a long and fulfilling retirement. Specifically, do the following to protect yourself from the risk of outliving your money:

1. Calculate your life expectancy. Contemplating how many years you have left to live isn't anyone's idea of a fun party game, but it's an important consideration for retirement planning, both while you're building your nest egg and while you're retired and living on a fixed income. It's not enough to assume that you'll live as long as your parents or siblings, and life expectancy has risen over the years. Use the Social Security Administration's Life Expectancy Calculator to get a sense of how long you can expect to live — then assume you'll live a little longer. With that assumption in mind, you'll be in a better place to accumulate a nest egg big enough to last.
2. Continue long-term investments in retirement. Conventional retirement planning wisdom suggests reducing your investments in high-risk, high-return assets, like stocks, in favor of more stable assets, like bonds, as you near retirement. And though ensuring that your nest egg is stable as you enter your retirement makes sense, your long-term investments shouldn't retire when you do. You can still invest a portion of your portfolio in high-risk, high-return assets after you retire — just don't plan on accessing that money until 10 or more years after your retirement date. That will give your money more time to grow while you rely on your more stable assets during the first few years.
3. Delay collecting Social Security benefits. Your Social Security benefits are guaranteed, and they increase with every year you wait between 62 (the earliest age at which you can take benefits) and 70 (the age at which the benefits stop increasing). Delaying your benefits as late as you can could help you build a benefit big enough to count on. Your Social Security benefits generally won't be enough to live on, so it's not ideal to rely on them as a primary retirement income strategy. Consider your Social Security benefits as a supplement to your retirement income; delaying them as long as possible is a savvy way to provide a more substantial financial cushion for your future.

Risk 3: Underestimating Health Care Costs

The cost of health care in retirement might come as an unpleasant surprise. As of 2021, Medicare Part B premiums will cost most beneficiaries $148.50 per month — and maybe higher for people with higher incomes. And you can expect to pay a yearly deductible of $203, after which you'd pay 20% of the Medicare-approved amount of medical care. Prescription drugs aren't covered by original Medicare; retirees must plan for the cost of their prescriptions, either by enrolling in a Medicare Part D plan or paying out of pocket.

In addition, Medicare doesn't always cover everything you need to take care of your health. In particular, Medicare doesn't cover long-term care services (any kind of care that does not require specific medical knowledge). An Alzheimer's patient who is otherwise completely healthy but needs help with everyday tasks like eating, bathing and dressing can't count on Medicare to cover the nonmedical costs of living.

These costs and coverage gaps are why you need to plan for health care in retirement. Taking care of yourself by eating right, exercising, getting enough sleep and taking preventative care measures is a good long-term strategy for mitigating your medical costs in retirement. Healthy living isn't a miracle cure for aging, illness or accident, but it helps you feel good now and sets you up for a healthier retirement.

Even if you're a marathon runner who lives off broccoli smoothies, you'll need to plan for future health care costs. Two common strategies include:

• A Health Savings Account (HSA). This kind of tax-advantaged savings account lets you set aside pretax dollars that grow tax-free and can be withdrawn tax-free if the money is used for health care expenses. It can help you to save money on your taxes while planning for future health care expenses. Nonmedical withdrawals are subject to income tax, but you still get to enjoy the tax-free growth.
• Long-term care insurance. This insurance pays for long-term nonmedical care that's not covered by Medicare. Long-term care insurance premiums can be steep, but the cost tends to be most affordable for people between the ages of 60 and 65.

Though there are myriad risks that could derail your retirement, proper planning and smart choices can help you avoid them. That way, you can enjoy your retirement instead of worrying about it.