Since the oldest baby boomers are now reaching retirement age, a lot of national attention has focused on this growing number of older Americans. We can all expect to live many years in retirement, but Social Security and Medicare will be strained. To make matters worse, most people are saving less than they should. Planning for a long, secure retirement has now become more important than ever.

Life Expectancy Trends
Gains in life expectancy over the last century have been dramatic. According to the National Center for Health Statistics (NCHS), from 1900 through 2004 (the most recent year for which statistics are available), life expectancy at birth for the total population increased from 47 to 78. Much of the gain in life expectancy at birth came in the first half of the 20th century, as public health projects and scientific discoveries helped control many of the infectious diseases and unsanitary conditions that led to a high number of childhood deaths.

Life expectancy for individuals who reach age 65 has also been steadily increasing. According to the NCHS, life expectancy for older individuals improved mainly in the latter half of the 20th century, due largely to advances in medicine, better access to health care, and healthier lifestyles. Someone reaching age 65 in 1950 could expect to live approximately 14 years longer (until about age 79), while someone reaching age 65 in 2004 could expect to live approximately 19 years longer (until about age 84).

Reduce the Odds of Outliving Your Money
Using life expectancy tables or calculators to estimate how long you'll live can help you plan for retirement. Once you understand how many years you might spend in retirement, it may be easier for you and your financial professional to put together a realistic plan to help ensure that your retirement funds will last for a lifetime.

Here are a few planning tips:

• Prepare for several financial scenarios. For example, how much money will you need if you live to age 75? Age 85? Age 95?
• Recalculate your life expectancy periodically. Statistically, life expectancy changes over time.
• Consider your spouse's life expectancy as well as your own when determining your retirement income needs. According to NCHS statistics, women live 5 years longer than men, on average, although the gap is slowly closing.
• Plan for the possibility of needing long-term care. The longer you live, the greater the chance that you'll need assistance with day-to-day tasks or even expensive nursing home care that could wipe out your retirement savings.