A similar approach can work for long-term care costs. Rather than living too meagerly out of fear of unknown, exorbitant health expenses down the road, those who are single with no potential relatives to assist with care may want to consider purchasing a long-term care policy.
But many are suspect of the policies or recoil at their high premiums. Another option is to set up a separate account that could be used to fund a certain period of time for care. Studies show the average time needed for long-term care is about three years. (Women tend to need 3.7 years, while men require 2.2 years.)
Finally, sometimes the reason for overly conservative retirement spending is the desire to leave money to children or grandchildren. That's benevolent, but it's usually more productive to figure out why that's a priority, and to set specific amounts and for whom, rather than having abstract goals to make sure family members are "taken care of." Try taking care of yourself first.
Alexis Leondis is a Bloomberg Opinion columnist covering personal finance. Previously, she oversaw tax coverage for Bloomberg News.