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Life expectancy calculator
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April 10, 2000: 10:45 a.m. ET
How to plan for retirement when the 'crystal ball' says you'll live to 100
By Staff Writer Jennifer Karchmer
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NEW YORK (CNNfn) - You drink two cups of coffee a week, you never touch cigarettes, and you hop on the treadmill each night. On top of that, your family tree is as strong as an oak -- your grandparents all lived into their 90s.
So when you punch this information into a life expectancy calculator, it says you'll live to 102! Should you smile, since you obviously have a strong longevity gene? Or should you gasp, thinking that your long-term account needs fine-tuning to provide for you almost 40 years after you hang up your hat and retire?
"If we're entering a time when people can improve their health, then it's important to be improving your wealth as well," said Thomas Perls, author of Living to 100: Lessons in Living to Your Maximum Potential at Any Age. "If you're going to live into your 90s in good health, then you're going to need money." 
Financial planners say longevity calculators, often found on financial Web sites, can be useful guides when mapping out a long-term savings plan. And whether this crystal ball of sorts says you'll live to 82 or 102, your retirement account needs to be aggressive during those later years, they say.
Tool time
Financial advisers who use life expectancy calculators and tables with their clients warn that you shouldn't rely solely on the results.
"We would never use it as our only book in the library, but it's a great way to start," said certified financial planner (CFP) Ken Stern with Asset Planning Solutions in San Diego.
Typically, these guides ask questions related to diet, alcohol consumption, smoking, family history, and height and weight.
Some sample questions:
-Do you smoke or chew tobacco, or are you around a lot of secondhand smoke?
-Do you eat more than a couple of hot dogs, slices of bacon, or a bologna sandwich each week?
-Do you try to get a sun tan?
-Did more than one of the following relatives in your family live to at least age 90 years in excellent health: parents, aunts/uncles, or grandparents?
-Do you take vitamin E and selenium everyday?
Source: Alliance for Aging Research.
"The tables don't truly question the client -- where did you spend most of your time last year?" Stern said. "They don't tell you how to invest better."
Retirement isn't what it used to be
Retirement used to mean collecting a pension and Social Security benefits during your golden years after working for the same company for 25 years. 
But today, retirees are living off of their savings plans and 401(k) money they stashed away from several jobs.
When Social Security was created in the 1930s, the average life expectancy was around 62, Stern points out.
Today men can expect to live to 74, on average; women, to 81. So that means your retirement plan must be strong enough to offer you income for 10-20 years after you get your last paycheck, financial experts say.
"Your health habits in the Baby Boom years will have dramatic effects in the future," said Perls, acting chief of gerontology at Beth Israel Deconess Medical Center in Boston.
It's not all bonds
Whether you live to 82 or 102, you may very well still be playing games with your grandkids, gardening in your backyard, and even teeing off at noon.
Financial planners say merely re-allocating your portfolio into bonds at retirement is an old wives' tale, about as effective as slapping butter on a burn.
Stern suggested that one should have about 15 percent of your retirement portfolio in bonds if you're also receiving a company pension and Social Security benefits.
If you need to rely more heavily on your own savings during retirement because you don't have a pension plan, then you should re-allocate about 25 to 35 percent of your retirement savings to bonds since you'll need more income, he said.
"Whether you're a 20-year-old or a 70-year-old, it's the function of the premise that stocks outperform bonds and someone should have as much in stocks as they are comfortable with from a risk level," said CFP Steven Kaye of the American Economic Planning Group in Watchung, N.J.
Alternative investments
Also, both retirees and younger investors should diversify their portfolio into areas they may never have given thought to, such as real estate, gold, and precious metals, Stern said. While more risky, these sectors' performance is cyclical, usually peaking opposite technology stocks.
So cushioning your portfolio with a 2-to-5 percent allocation in any of these "alternative investments" may offset market dips, such as the recent decline in the tech-heavy Nasdaq.
Most large, well-known mutual fund shops offer funds in these categories, such as the Franklin Real Estate Securities Fund (FREEX), the Vanguard Gold and Precious Metals Fund (VGPMX), and the Invesco Gold Fund (FGLDX).
The Century Club
So as more and more Americans are celebrating the three-digit birthday thanks to strides in medicine and technology, researchers are trying to figure out how they're saving for a 40-year retirement.
Dr. Lara Terry, a geriatric fellow at Harvard Medical School in Boston, is studying the saving habits of centenarians and their children who are in their late 60s, 70s, and early 80s.
Currently there are 50,000 centenarians -- people who are 100 or older -- in the United States.
"There are going to be more and more centenarians down the road, people who never predicted they would reach 100," said Terry, who plans on presenting the results of the study this summer. "How do they manage their money? Are they planning differently? Were there things they would have done differently?" 
-- Click here to send comments about this story to Staff Writer Jennifer Karchmer.
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