You may think that if you have a retirement plan that covers your day-to-day expenses, you’re in good shape, but the truth is, you also need to plan for expenses that go beyond the essentials you’re paying for now. What if you have you an unforeseen medical expense? What if your investment portfolio takes a nosedive?

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Financially planning for the unexpected is essential to ensure you can weather any storms that may come your way in retirement. According to “The Psychology of Money” author Morgan Housel, here are three ways to do so .

Save More Than You Think You Need

Having extra liquid money in the bank will ensure you’re prepared to cover unexpected expenses that may come up during retirement years.

“The first line of defense for a lot of people can be a big chunk of savings,” Housel told Lincoln Financial as part of its “The Action Plan” video series . “You don’t need to be saving for anything specific. It’s your emergency fund — it’s right there.”

This can also serve as a safety net if you’ve underestimated your living costs.

“Having room for error in your finances is so important in the long run as well,” Housel said.

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Invest In the Proper Insurance

While your emergency fund may be able to handle one-off costs , it’s also a good idea to invest in the appropriate insurance coverages you many need.

“Insurance, after your emergency fund, can be great,” Housel said. “It’s your medical insurance, life insurance — all that you have.”

Add Annuities to Your Retirement Portfolio

Housel recommended annuities as a way to provide guaranteed income throughout your retirement . This will remove a lot of the financial uncertainty that can occur during this phase of life.

“So much of the financial industry is based off of, ‘How do I become wealthier?’ but it can be overlooked how much people just want to remove uncertainty from their life, and be protected on the downside,” he said.

“Do it with something like an annuity, where you’re not going to become the richest person in the world doing it, but you’re removing a lot of uncertainty in your life,” Housel continued. “That money is going to be coming in for your expenses in the future.”

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This article originally appeared on GOBankingRates.com : 3 Ways To Financially Plan For the Unexpected in Retirement, According to Morgan Housel