There's a lot to think about as you prepare for retirement. Not only do you have to consider how you're going to spend all your free time, but you also have to think about how much retirement will cost.

The average worker expects retirement will cost around $1.7 million, according to a survey from Charles Schwab. Although that number may seem exorbitant, it may not be an unrealistic estimate for many retirees. With healthcare and long-term care expenses alone potentially costing hundreds of thousands of dollars, retirement is more expensive than you may think.

There's also one factor that could significantly drive up your retirement costs, and a fifth of workers are doing absolutely nothing to prepare for it.

Older couple looking at documents and using a calculator

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The retirement risk many workers are overlooking

Most people want to spend as much time as they can in retirement, but from a financial perspective, a long lifespan can be dangerous. 

Retirees are living longer than ever, with a third of today's 65-year-olds expected to live until at least age 90, according to the Social Security Administration. Furthermore, an estimated 1 in 7 retirees will live to age 95 or beyond.

However, many workers aren't taking this factor into consideration when creating their retirement plans. In fact, approximately 20% of Americans haven't taken any steps at all to prepare for a potentially long lifespan, according to a report from TD Ameritrade.

Underestimating your life expectancy can be incredibly costly, because if you live longer than you expected, your savings could run dry too early. Even if you only live, say, five years longer than you'd planned, if you're pulling $50,000 per year from your retirement fund, that's $250,000 in expenses that you haven't prepared for.

If you run out of savings too soon, you may be forced to depend on Social Security benefits alone to make ends meet in retirement. But considering the average beneficiary only receives around $18,000 per year, you may need to make some serious financial sacrifices in your final years.

How to prepare for a longer retirement

Estimating how much you need to save for retirement is challenging, because nobody knows exactly how long they'll live. But do your best to come up with as accurate an estimate as you can.

Take an honest look at your health, and use that as a basis for your life expectancy. Also, consider your family health history, and see whether there are any diseases or illnesses that tend to run in your family. You still won't be able to pin down exactly how long you'll live, but if you're in tip-top shape and the majority of your relatives have lived long and healthy lives, there's a good chance you'll live longer than if you're currently battling health issues and have a history of illnesses in your family.

It's also a good idea to consider a back-up plan if your retirement fund does run dry. Even with all the preparation in the world, there's always a chance you'll run out of savings before you reach the end of your retirement. But if you have a plan in place for what to do when or if that happens, you'll be able to live more comfortably.

For example, you may choose to delay claiming Social Security benefits because that will result in bigger monthly checks. If you live a long lifespan, you'll actually receive more money over a lifetime by delaying benefits compared to if you claimed early -- and those fatter checks can make a big difference if you run out of savings late in life.

You may also decide to find a source of passive income in retirement, which can continue providing extra cash even when you're no longer able to work. Keep in mind, however, that many sources of passive income require a significant amount of work upfront before they become passive, so it's a good idea to set your plans in motion early -- not when you're in your 90s and broke.

A longer lifespan can allow you to enjoy your senior years to the fullest, but it can also cause hardship if your finances aren't prepared to last that long. Although you can't predict exactly how long you'll live, estimating it the best you can and adjusting your retirement plans accordingly will give you a good shot at living out the rest of your years comfortably.