Did you know that your retirement fund is more likely than not to experience a setback? According to the Health and Retirement Study (funded by the National Institute on Aging), in the 10-year period between 1992 and 2002, seven out of 10 adults ages 51 through 61 experienced one of the following:

  • A major medical condition, like cancer, diabetes, a stroke, a psychiatric condition, or heart problems
  • Health problems that forced them to curtail work
  • A layoff
  • The death of a spouse
  • Divorce

This definitely isn't the stuff that retirement dreams are made of. But being aware that the worst can happen -- and preparing just in case -- can work to your benefit. If you're smart, you'll take steps now to ensure your financial nest egg won't completely crack under the pressure of a setback.

To best prepare yourself for a retirement shocker, take these actions now:

  • Invest in disability insurance. The Social Security Administration estimates that a 20-year-old worker has a 30% chance of becoming disabled before retirement age. That's nearly twice the percentage of those same workers who will die before age 65, which means that disability insurance can be even more critical than life insurance for most folks. Check to see if it is offered through your employer; if not, consider securing it on your own.
  • Diversify your skills. Since you last dusted off your resume, the employment landscape may have drastically changed. Take a look at workshops, certificate programs, and work experiences that could substantially enhance your skill set (and marketability) should a job change become necessary. By making yourself more valuable to your current employer, you may even be able to negotiate a higher salary now.
  • Ask yourself the critical question, "Is there a way to use my job skills and experience from home?" You'll want to take a look at how your talents could be channeled into a home-based or online business -- something you could run from home should you be sidelined from your main career by poor health or another calamity. A therapist in private practice may switch over to phone counseling, for example, or a handyman might start a service that checks credentials of service folks, screens them, and then offers referrals -- all of which can be done with a phone and computer. If you wait to think about how you could make necessary career adaptations until after a medical crisis hits, you'll lose valuable time, momentum, and money while you scramble for a solution.
  • Secure adequate life insurance. Most folks are aware that they need life insurance, especially if they have dependents, but fewer people remember to upgrade insurance coverage when their incomes rise over the course of their careers. Since expenses tend to rise to meet income, it's crucial to evaluate your existing coverage at regular intervals to ensure your family will be adequately protected.
  • Save early, save a lot. Many folks wait too long to begin saving adequately for retirement. The time to save is now -- before an unexpected health or personal crisis hits. Not convinced to take action? Read the article "Invest Early and Often" for more must-know reasons to save.
  • Maintain your health. Exercise and healthy eating aren't a guarantee that you won't experience health problems, of course, but their benefits are numerous, including enhanced well-being, weight control, strengthened heart and lungs, reduced risk of chronic disease, and better-quality sleep. That sounds like a health "insurance" plan that's worth the investment!
  • Take the pulse of your marriage. Keeping your marriage strong isn't just good for your emotional well-being; it's good for finances. Divorce in later life severely drains the financial coffers, especially for women.

While focusing on the worst isn't pleasant, planning for an unexpected drain on your retirement funds just makes good sense.

This article is adapted from the Motley Fool Green Light Money Answers archive, which features more than 100 articles on personal finance topics such as taxes, credit, and beginning investing, organized by subject and life stage. For access to this content -- plus the current newsletter, back issues, members-only discussion boards, and advisor blogs -- take a free 30-day trial today!  

Fool contributor Elizabeth Brokamp is a licensed professional counselor who regularly talks money with her honey, Robert Brokamp, editor of The Motley Fool's Rule Your Retirement newsletter and co-advisor of Motley Fool Green Light. The Fool has a disclosure policy.