What You Should Be Worried About

In any given year, there's a 1-in-700,000 chance you'll be hit by lightning. Live to age 80, and those odds increase to 1 in 5,000. Still feeling lucky? Compare your chances of a close encounter with a bolt from the blue with the odds that you'll win the lottery: 1 in more than 175 million, at least for Virginia's Mega Millions jackpot.

But you shouldn't worry about the risk of sudden electrocution from on high -- or a sudden deluge of greenbacks. Instead, focus your concerns on disasters like these, which are much more likely to strike than lightning:

• Watching a medical catastrophe wipe out your savings.
• Keeping your money in the wrong investments for your age, risk tolerance, and needs …
• … Or the wrong kinds of accounts.
• Losing your home after a one-two punch of sudden job loss and a nonexistent emergency fund.
• Dying without an estate plan, leaving your children short on inheritance and long on headaches.
• Suffering through a gruesome retirement for lack of a sensible retirement plan.

Luckily, you don't have to worry about such grim scenarios. All these dark, depressing clouds have a silver lining: It's not too late to salvage your retirement.

Running the numbers
First, let's assess your situation a little. What kind of emergency money do you have accessible? Your rainy-day funds might be stashed in a savings account, laddered CDs, or a money-market account. Wherever you've squirreled them away, make sure you can access several months' worth of living expenses in the event of sudden calamity.

Unemployment is high right now, but even in a good economy, it strikes at unpredictable times. If you have no dependents and are easy to employ, you may not need too big a chunk of your income on tap; just three months of expenses is a good start. But if family members or other loved ones depend on your paycheck, or if the other wage-earner in your household is employed in a shaky field, a minimum of six months' expenses is sound.

Now take a look at your retirement plans. Will your nest egg really be enough to live off for the rest of your life?

If you start with $300,000, and withdraw a reasonable 4% per year in retirement (adjusting that for inflation each year), you'll get $12,000 in the first year -- or $1,000 per month. Will that be enough, even with some Social Security money added in? For many people, the answer is no. Even a nest egg of $1 million will provide just $40,000 per year, which isn't enough for some.

Invest to win
You can greatly improve your investment performance in several ways:

Invest more. If you're socking away $5,000 per year, aim for $10,000 -- and see if you can top even that. It might not be easy, but the amplified returns down the road will be well worth it.

Invest for higher returns. If you have money in mutual funds, examine their track records and managerial performance. The vast majority of stock funds don't perform as well as simple (and less expensive) broad-market mutual funds.

Consider index funds for their low fees and broad diversification. And when you're comfortable branching out, focus on finding funds that have been proven to outperform the index. The Amana Trust Growth (AMAGX) fund, for example, has posted market-whomping average annual gains over the past three, five, and 10 years, and recently included Qualcomm (NASDAQ:QCOM) and Cisco Systems (NASDAQ:CSCO) among its top holdings.

Get paid while you invest. If you're after individual stocks, seek out dividend payers and dividend growers for the long term. There's a lot of power in dividends. If you spend $10,000 on a stock that's paying you a 3% dividend, you'll collect $300 in the first year. If your company of choice hikes that dividend by 12% per year for 20 years, you'll eventually be collecting nearly $3,000 per year off that single investment.

Below, I've presented a few dividend stocks worthy of further research:

Sources: MSNMoney.com and Motley Fool CAPS.

So go ahead and worry -- but only until you get your financial ducks in a row. If you need a hand, our Rule Your Retirement newsletter service is here to help. In its pages, you'll find not only recommendations of promising stocks and mutual funds, but also specific guidance on asset allocation, investing for income, minimizing taxes, retiring as early as possible, and much more. Try it free for 30 days -- just click here to learn more.

Soon, you'll be sleeping more soundly -- at least, until you start worrying about other people's finances ...

Longtime Fool contributor Selena Maranjian owns shares of Johnson & Johnson. Johnson & Johnson is a Motley Fool Income Investor recommendation. Tyco International is a Motley Fool Inside Value selection. AFLAC is a Motley Fool Stock Advisor pick. The Motley Fool is Fools writing for Fools.