Once you leave the working world behind and settle into retirement, your financial needs will change significantly. Instead of living off your paycheck, you'll be living off those retirement savings that you so diligently built over your lifetime plus income from Social Security. And the types of insurance you'll need to protect your new lifestyle will be different from what you needed during your career.

Must-have: Medicare

The year you hit age 65, you'll definitely want to sign up for Medicare. If you fail to sign up during the initial enrollment period, you may end up paying for it later. Medicare is one type of insurance that every retiree needs.

Unless your previous employer covers retirees, without Medicare your only options would be to pay all your healthcare expenses out-of-pocket (which would run all but the healthiest of retirees out of money in short order) or get private insurance (which would be exceedingly expensive, if you could get it at all). If nothing else, enrolling in original Medicare-- which includes Medicare Part A and Part B -- should definitely be nonnegotiable for most retirees.

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Probably need: Medicare Advantage or Medigap

Original Medicare includes many basic medical expenses, but it has some pretty gaping coverage holes. That's why nearly all retirees get either a Medigap or a Medicare Advantage plan to provide the missing coverage. Medigap is a supplement to original Medicare; Medicare Advantage actually replaces original Medicare -- plus it comes with additional coverage for common healthcare expenses.

Even if you're quite healthy, it's a good idea to sign up for one of these plans during your initial enrollment period for Medicare. Should your health decline later, it may become very difficult to sign up for a supplemental plan in the future (for example, if you miss the initial enrollment period, Medigap plans are permitted to turn you down because of preexisting conditions). Given the many options that different Medigap and Medicare Advantage plans offer, it's likely that even the pickiest retiree will find one to suit his or her needs.

Probably need: Long-term care insurance

One coverage area that all forms of Medicare tend to skimp on is long-term care. Medicare only covers long-term care costs that have a clear medical component and meet certain requirements. For example, in order to have Medicare pay for a nursing home stay, you have to have spent time in a hospital first and have a doctor confirm that you need skilled nursing care (and even in this case, Medicare only covers the first 100 days in a nursing home).

Given how expensive long-term care can become, it's important to have a plan to pay for such care. Long-term care insurance is definitely the easiest way to take care of this expense. The best time to sign up for long-term care insurance is well before you need it; someone in his 50s and in excellent health will be offered much lower premiums than someone in his 60s and/or in relatively poor health. If you're in bad shape, you may not be eligible to sign up for long-term care insurance at all. This is one form of insurance where being proactive really helps.

Optional: Annuities

An annuity is an insurance product that basically protects you against running out of money. You hand over a pile of cash to the insurance company in exchange for payments in the future. How those payments are calculated and how long you get them depends on the type of annuity you get; there are dozens of options, some of which are more suitable than others.

For most retirees, a fixed lifetime annuity is by far the best choice. These annuities give you a set payment each month for the rest of your life, no matter how long you live. Having a steady, guaranteed source of income can be a huge boon for any retiree. You can stretch your money a bit further by buying the annuity in advance and choosing a deferred option, meaning that you'll wait a set number of years before you start receiving payments. Deferred annuities pay a lot more than immediate annuities, given the same initial investment.

Annuities are typically best for retirees who want to feel completely secure about their source of income. However, you can usually get a better return by simply living off the investments in your retirement savings accounts. So whether or not an annuity is a good idea for you depends on your level of risk tolerance and your comfort level with investment decisions.

Probably don't need: Life insurance

If you have a family, you probably have a life insurance policy to take care of your dependents in case something happens to you. However, by the time you reach retirement, your kids have likely grown up and headed off to start lives of their own. If there's no one depending on you for income anymore, then you really don't need a life insurance policy. You'd be better off canceling your policy and putting the money toward something else -- like, say, long-term care insurance.

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