How does retirement planning in 2010 differ from retirement planning in 1970? Let's start with one word-longevity-which has changed the idea of retirement from a brief, blissful rest at the end of life to almost a second youth, with relatively few responsibilities, increased mobility and vast, open swaths of free time.

Much of this change has occurred during the past 50 years as improved treatments for heart disease, stroke and other diseases expanded life spans and extended individuals' ability to remain active. From the time this magazine began publication, for instance, Americans' average life expectancy has jumped from about 71 to 78. Should one reach the traditional retirement age of 65, those numbers rise even higher: Today, a man's average life expectancy at 65 is 17.2 years (to age 82), roughly 32% longer than in 1970, when he could expect to last, on average, another 13.1 years. A 65-year-old woman today can expect to live another 20 years, on average, compared to 17 in 1970.

Today, the fastest-growing age group is 100-plus, whose numbers have jumped from 37,306 in 1990 to more than 96,000. The Census Bureau estimates that by 2040, American centenarians will number 580,000. For them, retirement could last as long as their careers, or possibly longer.

"Retirement is no longer a gold watch and a pension for a few years until you die," says Meg Green, who heads a wealth management firm in North Miami Beach, Fla. "People who are in good health expect to live into their nineties and beyond. They want to know what they will be doing for 30 or 40 years."

The most significant change, from the retirees' point of view, is a dramatic improvement in the quality of life, adds Jonathan Guyton, a principal at Cornerstone Wealth Advisors in Minneapolis. "More retirees are in better health, for more years. They have opportunities to do meaningful things in retirement and to have fun. They can have an exciting life."

But longevity has its price: Today's clients must confront and counter the threat of running out of money. Add the 2008 market meltdown and the trauma it left in its wake among investors, and you'll find high anxiety among the elderly-many of whom sold assets at the worst possible moment. It's a harsh situation, but it's good news for advisors, according to Alicia Munnell, director of the Center for Retirement Research at Boston College, who points out that asset anxiety increases the importance and value of financial advice. "Some retirement decisions had been automatic, but now choices have to be made," she says.

AN AGE-OLD QUESTION

The primary retirement planning decision is also the most basic-whether to do it. "Advisors often think of investment decisions when it comes to retirement planning," Munnell says. "In reality, the decision between working and not working trumps all others." The key to retirement planning is setting the time to stop pocketing paychecks and start relying on other sources of cash flow.

From the 1960s to the 1980s, the trend was to retire early, and the average retirement age sank to about 62, from around 67. Since then, however, as pensions withered, that trend reversed, and the average retirement age has bobbed back up to about 64, Munnell says. (This number does not reflect the massive layoffs that took place in 2009, and the many over-50 Americans who are discovering, to their dismay, that they may be retired whether they wanted it or not.)

Why are people increasingly willing to put in more years at the office? Munnell mentions fewer pensions with incentives to retire early and changes in Social Security. In addition, "more people are more educated now, and highly educated people tend to have longer careers," she says. "Their work is often less physically demanding. Also, health care costs have increased tremendously, so people are more inclined to work until age 65, when they can sign up for Medicare."

Two stock markets crashes in 2000 and 2008 did their damage to retirement dreams too. "Clients will say, 'I took a hit in my 401(k), so I'll have to work longer,'" says Judy Lau, who heads a wealth management firm in Wilmington, Del. "The idea of retiring at 55, 60 or even 62 may be a thing of the past."

If clients can keep working, they probably will profit. "Working longer can be a powerful solution," Munnell says. "If you can wait until age 70 to start Social Security benefits, you'll get a check that's 75% larger than the check you'd get at age 62."

POSITIONING THE PORTFOLIO

Drawing income from a portfolio might not have been much of a challenge in the 1970s and 1980s; according to Morningstar's Ibbotson SBBI (stocks, bonds, bills, inflation) yearbook, T-bill returns from 1970 through 1989 averaged 7.6% and inflation averaged 6.2%. Thus, clients could invest in T-bills or other cash equivalents, such as bank CDs and money market funds, and pull out 7% to 8% a year without dipping into their principal.