Soaring health-care costs can wallop consumers as they get older, even though some expenses remain stable. A recent study by the nonprofit Employee Benefit Research Institute (EBRI) suggests that the best way to plan for retirement health-care expenses is to divide them into two separate categories…

Recurring expenses include doctor and dentist visits and prescription medications. These generally are consistent throughout retirement.

Exception: Prescription drug costs can spike with certain medical problems, adding $1,000 to $2,000 to annual costs for possibly 10% of retirees.

Strategy: If you already are covered by Medicare, add up your yearly out-of-pocket expenditures for these recurring medical costs over the past year, then build this amount into your annual budget allowing for a 2% rate of inflation and a 3% return on savings. If you are not yet Medicare eligible, budget around $1,885 a year.

Nonrecurring expenses include nursing home stays, outpatient surgery, hospital stays and treatments, and special facilities such as rehabilitation programs.

Strategy: Create an investment account specifically to pay for these expenses. Earmarking a separate account this way, rather than keeping health-care money in a general account, is the best way to ensure that it is not misspent. Another EBRI study found that to have a 90% chance of covering retirement health costs, a man should plan for $116,000 in costs…a woman $131,000. The good news is that because nonrecurring health costs tend to occur mainly late in retirement, people still in their 60s can invest this money in a relatively aggressive portfolio of investments.