Retirement can be risky business, especially in today's tough times. Retirees often face daunting financial challenges, and these obstacles only grow during economic turmoil. However, even during a recession, there are ways you can manage these risks and enjoy a financially comfortable retirement.

Here are five of the most common retirement obstacles and the best ways to overcome them.

Risk #1: Outliving Your Cash Flow
In the retirement planning world, the risk of outliving your money is known as "longevity risk." Running out of cash is one of the scariest risks that all retirees face.

According to the U.S. Social Security Administration, Americans are living increasingly longer lives. The average 65-year-old will live to be 83. However, one in four 65-year-olds will live to be 90, and one in ten will live to the ripe old age of 95. That means you could live up to 25 to 30 years (or longer!) after retirement. Considering those stats, it's highly likely that your stream of retirement cash flow will dry up before you pass on.

How To Overcome It: There are many steps you can take to beat longevity risk. As long as you save up enough money for retirement, avoid overspending and invest wisely, your retirement years should be smooth sailing. You may also consider taking on a part-time post retirement job or even delaying retirement a few more years so you can earn income and beef up your retirement funds. (Make sure you know how staying the work force will affect your finances. Check out Working Longer: Will It Hurt Your Retirement?)

It's also critical to properly manage your assets. As you grow closer to retirement, talk to your financial advisor about transferring your portfolio from high-risk investments to lower risk ones. This will help you preserve your income and protect that nest egg you've worked so hard to build. You should also consider investing in annuities that don't start paying out until the age of 75 or 80. Look into joint and survivor annuities and deferred annuities.

Risk #2: Rising Inflation
Unfortunately, none of us are immune to inflation. Every single retiree will be affected by this dreaded phenomenon. The trouble is that it can be downright impossible to predict the rate of inflation.

According to the Society of Actuaries (SOA), annual inflation in the U.S. varied from 1.1% to 8.9% between 1980 and 2007. That's a fairly wide range. However, the average inflation rate throughout those 27 years was 3.5%. To put things in perspective, an item with a $1 price tag in 1980 would cost you $2.62 today, according to the U.S. Bureau of Labor Statistics inflation calculator.

How To Overcome It: To defeat ever-growing inflation, you should invest in assets that grow in times of inflation such as common stocks, Treasury Inflation Protected Securities (TIPS) and annuities with a cost-of-living adjustment. You may also consider taking a "semi-retirement" for a couple of years before you officially retire so you don't drain your retirement assets too soon.

Risk #3: Skyrocketing Healthcare Costs
The rate of inflation can have an even more significant impact on retirees when it comes to healthcare - an expense that becomes a growing portion of a retiree's budget. In fact, studies show that healthcare represents only 5% of the average person's budget before retirement, but it grows to 10% for retirees ages 65 to 74 and mushrooms to 15% for retirees 75 and older.

According to the SOA, if an over 65-year-old retired couple not covered by Medicare suffered from a catastrophic illness, their lifetime medical costs could easily exceed $1 million. Talk about breaking the bank. (Don't assume you're insured. Find out what you can expect from this healthcare program in What Does Medicare Cover?)

How To Overcome It: Currently, the future of the U.S. health care system is still a bit fuzzy. However, as of right now, retirees should plan to purchase medical insurance and Medicare supplements to support potentially astronomical post-retirement health care costs.

Risk #4: Stock Market Fluctuations
Because it's practically impossible to forecast what will happen to stocks, many retirees suffer from major stock market losses. With one major stock market meltdown, your nest egg could disappear in the blink of an eye. Unfortunately, this has happened twice in the last 10 years.

How To Overcome It: First and foremost, if you're approaching your retirement years, you should limit your stock market exposure. If you do invest in the stock market, be sure to diversify your stocks and spread your money among different investment classes and individual securities. This can greatly decrease your risk. You may also consider investing in financial products that invest in stocks, but guarantee against the loss of principal, such as principal-protected notes.

Risk #5: Long-Term Care Needs
Statistics show that 70% of people who reach the age of 65 will eventually require some form of long-term care. This means a great deal of us will face the exorbitant costs of assisted living, a nursing home stay or in-home care at some point in our life. According to the SOA, a nursing home stay can put you back $70,000 a year or more - that's per person.

How To Overcome It: When your retirement years are on the horizon, consider purchasing long-term care insurance (LTCI). Because LTCI helps cover the excessive costs of long-term care, it can protect your finances if you or your spouse were to face a long-term care event. What's another way to combat the risk of long-term care? Take care of yourself! Eat healthy, exercise and schedule regular check-ups with your physician.

The Bottom Line
Retirement definitely serves up some dubious financial challenges. But if you take steps to manage these five retirement obstacles, you can take on this risky business like Tom Cruise.

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