For some, those health care bills (and rising costs in general), are forcing them to rethink plans and retire later or look at part-time employment during retirement.
"We're hearing that people are working longer because they can't afford not to work," says Matheis. "Or they're retiring and going back to work."
The benefits may be more than financial, says Munnell. "Work is good for people," she says. "It provides structure, social interaction and a sense of accomplishment. Everything tends to indicate that staying employed enhances health." Besides the increased health care costs, retiring early means smaller Social Security benefits and the opportunity to invest for several more years in a 401(k).
Long-term care insurance
"One-third of people will need some type of long-term care," says Scott Leavitt, president of the National Association of Health Underwriters.
But it's not an easy decision. Coverage is not cheap and the complicated fine print often makes it advisable to get assistance from a neutral, third-party who is not selling the product.
The earlier in life you buy long-term care insurance, the lower your rate will be, but it's not cheap at any age. And for many 40-somethings, the outlay for their own long-term care takes a back seat to their kids' college funds and their own retirement accounts.
"Most people don't start thinking about it until they're in their late 50s or early 60s," says Praeger, who is also insurance commissioner for the state of Kansas. While consumers can "still get affordable policies then," the optimum time (not paying too far ahead but still locking in an affordable rate), is in the early to mid-50s, she says. "It's at least $150 a month if you purchase it at retirement," says Leavitt. "If you look at the investment, it's well worth it, even at that age."
Financial planner David Bendix, president of the Bendix Financial Group, bought his own policy in his 40s for roughly $1,000 annually. "If you wait until your 60s, the numbers are crazy," he says.
What will the policy cover? What will it allow you to do that you could not have done otherwise? Are you buying yourself a better standard of care? Or will it simply shield assets you don't have or don't need to protect? Will it cover in-home care? (Some policies bought before 2000 do not.) And is the insurance company large enough and financially stable enough to be around when and if you finally need it?
Says Matheis, "If it looks like a good deal, compared to other long-term care insurance products, it probably offers lower benefits."