A new study by the Society of Actuaries has shed light on a subject that should be of concern to retirees, according to this recently-published Money magazine article. While many retirees manage their day-to-day budgeting fairly well, a significant percentage are completely unprepared for financial emergencies, and when an unplanned expense comes along, they are often forced by their lack of preparation to make expensive financial decisions just to cope.

Unplanned Expenses Catch Retirees Off-Guard

“It’s easy enough to budget for known monthly expenses such as your mortgage, utilities, transportation, food and other necessities,” Money magazine reports. “Then” – once the regular bills are covered – “you might build in a little cushion for discretionary fun.”  But the problems arise when larger-than-normal expenses hit, catching many retirees off guard. “When it comes to retirement budgeting, expect the unexpected,” advises the survey, which uncovered an alarming statistic: half of retirees in their mid-70s and older can’t come up with the cash to cover an unplanned expense of $10,000.  The survey also showed that older baby boomers don’t fare much better: about 40 percent lack the emergency savings to cover a $10,000 bill.

“The foundation of a solid financial plan is to make sure you have enough cash in an emergency fund to handle something like this,” said a spokesperson for the Society of Actuaries. People can usually plan for things they spend money on every month, but fail to have enough cash on hand for the occasional unpleasant surprise. The survey also discovered the interesting fact that there are two categories of expenses which seem to catch retirees off-guard most often: your house and – surprisingly – your teeth.  “What tends to slip through the cracks are dental work and home repairs, two pricey expenses that often catch people unawares,” Money reports. “These two categories topped the list of financial shocks in retirement, followed by significant spending on prescription drugs.”  According to the Society of Actuaries research, just under 30 percent of retirees experienced the pain of major home repairs or upgrades, while about one-fourth had major dental expenses.

Insurance Typically Doesn’t Help

Many retirees seem to believe that homeowner’s insurance or Medicare will cover some of these hefty costs, but they are often in for a shock. Your homeowner’s policy typically covers damage from fires, floods, earthquakes and the like – depending on the terms of your coverage – but it usually doesn’t step in when you suddenly have to spend $15,000 on a new furnace or $10,000 to replace the worn-out roof. As for dental work, Medicare doesn’t cover most routine procedures, and even Medigap and Medicare Advantage dental plans have severe limitations and co-pays than can cost you thousands. The Money article says these are the kinds of expenses that catch many retirees unprepared.

The solution, says the actuarial research, is to have ready cash on hand, even if it’s in a savings account that earns meager interest. “Financial advisors often recommend that people keep three to six months’ worth of living expenses in a liquid account to deal with such unforeseen expenses,” the Money article reports. These experts emphasize that having ready cash is important whether you’re working or not, since unplanned expenses can occur any time. Sadly, the consequences that happen when big, unplanned bills meet small, unprepared reserves can create financial havoc with an inadequate financial plan. If you don’t have cash available to meet the emergency, you’re often left with two unattractive options: either you are forced to liquidate part of your portfolio, or you decide to pull out your credit card and borrow to pay the bill. In the first instance, you sacrifice your nest egg and the earnings it generates, and you might find yourself with a tax burden that makes the situation even worse. In the second situation, those credit card fees tend to pile up month after month as the hole grows deeper.

Prepare for Unplanned Expenses by Looking Ahead

We here at AgingOptions do have some suggestions to offer if you find yourself in the predicament described in the Money article. First, for those who qualify, there may be resources to assist you with home repairs: you’ll find useful links here on this U.S. government website. If credit card debt is an issue, as it is for millions of seniors, we found this 2017 NerdWallet article helpful. It not only explains the problem but also offers a host of links and resources to help you get out from under what for many has become an unbearable burden of debt.

But the best advice we can give is to plan well, not just for your finances, but for all aspects of your retirement. Here at AgingOptions, Rajiv Nagaich employs a powerful planning strategy called LifePlanning, encompassing all the essential aspects of successful retirement: your money, your home, your medical coverage, your legal protection and your family support. With a LifePlan in place you can stop worrying about dying broke or becoming a burden to those you love. Wherever you are in the retirement planning process, we invite you to bring your questions and come hear the answers at an upcoming LifePlanning Seminar, a fun and fast-paced session that is information-packed and absolutely free. For a complete calendar of seminars, visit our Live Events page and register for the session of your choice.

You can enter your retirement years well-prepared and ready for just about anything, with a LifePlan in place.  Age on!

(originally reported at www.time.com/money)