While most of us expect to retire at a certain age, or scale down our work gradually over a few years, it's important to acknowledge and prepare for the unexpected. Many of us will not be able to work as long as we plan for reasons of health, unexpected job loss or the need to provide care and support for a loved one. Government programs intended to provide income and health care assistance in retirement may not be able to keep pace with the needs of an increasingly long-lived population.

Surveys show that most of us underestimate our income needs in retirement. Many financial planning self-help articles and websites suggest using 80% of your current expenses as an estimate of your retirement income requirements, yet two-thirds of retirees find their income needs remain the same or increase in retirement. We also chronically underestimate the cost of medical care and prescription drugs, and overestimate the resources that will be available to pay for them. Many workers expect to receive employer-subsidized health care as retirees, but companies have been restricting or eliminating retiree health benefits in the last several years because of rapidly increasing costs. To prepare adequately for retirement, and to be ready for the unexpected, we should each save early and regularly to build wealth for the future.