Entering retirement? Be prepared for a step down in your quality of life —especially if you have a health problem and wind up needing long-term care.

Nearly two-thirds of U.S. households (64 percent) won’t be able to maintain their standard of living in retirement because of the cost of long-term care, even if they’re spending $3,500 a year on a comprehensive long-term care insurance policy, according to a study released earlier this month by the Center for Retirement Research at Boston College.

Even tapping into home equity often doesn’t help. Researchers found that 65 percent of households that use a reverse mortgage to pay for long-term care costs would still be unable to live as well in retirement as they had previously.

Retirees who don’t have long-term care costs aren’t much better off, the researchers found. A whopping 44 percent of households were still projected to face a lower standard of living in retirement, even when people worked to age 65 and annuitized their financial assets for a steady stream of income.

“Because the costs of long-term care insurance and other health expenditures are rising and the income system is contracting, these latest findings raise major concerns about the retirement security” of Americans, said Alicia Munnell, director of the Center for Retirement Research.

And it may only get worse. Munnell said the share of households that will be unable to maintain their standard of living in retirement increases dramatically with each subsequent generation. The center found that 52 percent of boomers born between 1948 and 1954 are at risk of being financially unprepared for retirement, compared with 64 percent of boomers born between 1955 and 1964, and 71 percent of Gen X-ers born between 1965 and 1974.

Americans are already getting the gloomy message.

In a separate survey by the nonprofit Employee Benefit Research Institute, only 13 percent of adults—a record low—said they were very confident that they’ll be able to afford a comfortable lifestyle during their retirement years. That’s down from 18 percent in 2008 and 27 percent in 2007, according to the survey released April 14.

Current retirees aren’t feeling any more positive. Only 20 percent told the institute they are very confident that they will have financial security throughout their remaining years, a decline from 29 percent in 2008 and 41 percent in 2007.

Workers mostly cited economic uncertainty, inflation and the cost of living as reasons they’re losing confidence about retiring comfortably. Job losses, pay cuts, a decline in retirement savings and an increase in debt also contributed to their anxiety.

Many workers are already taking steps to shore up their finances. Among those who doubt they’ll be able to secure a comfortable retirement, 81 percent say they’re reducing their expenses, 43 percent say they’re changing the way they invest their money and 38 percent say they plan to work more hours or take a second job.

Among people participating in a workplace retirement savings plan, 72 percent maintained their contributions during last year’s down market and 18 percent increased them. The rest decreased their contributions.

Looking ahead, 28 percent say they plan to retire later to increase their retirement security. And 72 percent say they expect to supplement their income by working in retirement.

Carole Fleck is a senior editor at Bulletin Today.