In 1960, the average person spent $146 per year on healthcare. Today that number is more than $10,000. Adjusted for inflation, the cost is up nine times.

Those numbers are frightening enough, but after the age of 70, some can expect to pay as much as $600,000 in out-of-pocket expenses – especially those with more complicated health issues.

But there is some good news.

A recent study reported that only 1% of people should expect to hit that $600,000 number, and only 5% should expect out-of-pocket healthcare costs of as much as $300,000.

The number most of us will face after the age of 70 – according to many reports – is $120,000. (And remember, these costs are after Medicare.)

It’s called medical spending tail risk.

Marital status, personal income and health play a role in these costs, but the biggest factor that determines where the costs will fall appears to be luck.

That means there aren’t any specific variables we can control to address these potentially huge costs.

Most people are doing what they can: working longer and spending down their assets more cautiously.

First, working longer is the most obvious solution. Every year that you work beyond the minimum retirement age of 62 adds a bonus of 8% per year to your Social Security benefits.

Working longer also allows you to save more and put more money in your employer’s retirement plan. Any amount you can add to your nest egg helps and will increase your standard of living in retirement.

The second option – spending down cautiously and not splurging during the “end of the work world” celebration phase – has also produced some significant results.

A recent BlackRock study found that the wealthiest people (with assets of $500,000 or more) had decreased their assets by only 17% after 17 to 18 years in retirement.

Individuals in the medium wealth group (with $200,000 to $500,000) reduced their nest eggs by a similar amount, and those with less than $200,000 were down 20% for the same period.

Lastly, Washington is looking into changes that would address some of the late-in-life cost issues. The new law Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act focuses on real problems many seniors face. It is worth a read.

The only way I see to avoid a potential financial disaster after 70 (or at least limit its effects) is to save as much as you can, be very careful about your spending and work as long as your old body and mind can handle it.

Good investing,