Boston College's Centre for Retirement Research believes the high cost of long-term health care will lower the quality of life for nearly two-thirds of today's retirees, as $77,000 a year for a nursing home room and $20,000 for in-home care, are expenses most people are not prepared to absorb.

Analyzing health care and long-term care costs, the study found that 64% of unprepared baby boomers who are retiring, will not be able to maintain the lifestyle they had prior to retirement, making it imperative to sound a warning now.

Millions of workers have seen their retirement savings significantly reduced due to the collapse of the stock market, which has focused attention on how ill-prepared people are as far as retirement expenses are concerned.

Inadequate personal savings, a Social Security system that will most likely fail to provide current levels of support and rapidly rising health care costs signal an impending retirement crisis caused by a combination of problems.

The non-profit National Coalition on Health Care says health care costs rose nearly 7% last year, around $7,900 per person, with the study illustrating the harsh reality of people spending too much, borrowing excessively and saving too little, leaving a generation unprepared for retirement, the financial crisis accelerating the process.

Options to pay for healthcare include relying on Medicaid, long-term care insurance, selling the family home, or taking out a reverse mortgage, with Medicaid the most likely option for the poorest retirees.

Those with higher incomes would likely prefer to buy insurance, costing about $3,500 a year if acquired at age 65, with a policy costing around $600 a month, if bought at age 75.

Long-term care can include in-home assistance with shopping, cooking, housework and other basic duties, but could also mean a stay in a nursing home, with current estimates indicating one-third of people aged 65 could need to visit a nursing home for a minimum of three months, with some for a prolonged period of time.

On the very expensive side, a home health aide for four hours a day, five days a week can cost nearly $20,000 a year, while a private nursing home can cost up to $77,000.

Overall, Centres for Medicare and Medicaid say long-term care costs exceed $100-billion a year.