In my business, we have a keen interest in understanding how long people will live. In fact, because we have a financial interest that hinges on understanding longevity and life expectancy, I have been studying death and dying for more than 20 years. Perhaps because I'm turning grayer at the temples or maybe because I'm managing the aging issues of my own parents, I have taken a hard look at the current state of longevity in America, and we should all be very nervous. Most of us will live longer than we expect, it will cost us a great deal and options are limited.

Success of Modern Medicine
In the past 100 years, we have made great strides in improving human health and increasing life expectancy. The average American lived just past the age of 40 in 1900. Today, that age has risen to more than 78. Since 1940, we have gained a year of life expectancy every five years. If we keep this pace, by the end of this century, the average American will live to be close to 100 years of age. We already have a lot of centenarians. Back in 1950, about 2,300 Americans were 100 or older. Today, we have more than 53,000, an increase of more than 2,200 percent -- while the American population has merely doubled during that time.

The Cost of Longevity
Even though you may want to live forever, the question becomes: Can you afford it? In a recent survey, many pre-retirees believe they will need less than two-thirds of their current annual income in retirement. Most financial planners suggest planning to spend 70-80%. In the same survey, pre-retirees expected to withdraw about 9% of their assets each year, a rate that will put many at risk of running out of money. And if you plan to work during retirement to make up any shortfalls, think again. While two-thirds of pre-retirees say they plan to continue working during their golden years, only one-third of current retirees have jobs, and almost half of current retirees left their jobs involuntarily. The cold hard reality is that the cost of longevity is quickly outpacing most people's ability to pay for it.

What costs so much?
You don't need me to tell you about rising costs of living. Anyone can compare the cost of groceries, gas and energy and quickly see that the recession didn't slow down the increasing costs of everyday items. And while the consumer price index has risen an average of 2.4% each year for the past decade, the costs we need to truly worry about are for long-term care and home health care.

Even though you may want to live forever, the question becomes: Can you afford it?

Let's start at the top: The average cost of a private room in a nursing home rose about 4% in the past year to about $250 per day ($7,500 per month or nearly $90,000 per year.) The average rent in an assisted living facility went up about 15% in the past five years to nearly $3,500 per month. Staying in your own home is less expensive, but it's not cheap. Medication monitoring by a nurse costs about $350 per month and rates for basic home health services (housekeeping, meal preparation, assistance with bathing/dressing, and other services) cost more than $20 per hour. Adult daycare services average nearly $80 per day ($2,400 per month or nearly $29,000 per year). (MetLife Market Survey of Long-Term Care Costs, 2012)

The Boomer Conundrum
As longevity increases and the costs associated with living longer skyrocket, we are heading for a retirement crisis in America. If the current U.S. lifespan increases by one year over government projections, private pension systems will incur a $115 billion hit. If you factor in that 401(k)s and home values were hit hard by the recession -- losing half a decade of potential growth during the downturn -- we see that many pre-retirees and boomers have a long way to go in order to successfully retire. In a 2011 study, the Associated Press reported 44% of boomers lacked confidence in being able to retire. My company's own study (performed last year by research firm ICR) pegs that number rising to 55 percent.

Options?
Unfortunately, seniors have few "traditional" options. Financial planners will suggest the overly simplistic solution: Save More. Clearly, if seniors and boomers could save more, they would; but rising costs and tattered savings vehicles have made this nearly impossible.

Frankly, most seniors need to go "off script" and look at other, non-traditional financing strategies to help pay for retirement. Reverse mortgages enable seniors to tap the equity in their home to help pay for retirement. Self-directed IRAs can be used to invest savings in investments off Wall Street such as real estate. Life settlements offer a way to transform value trapped in life insurance into cash that can be used now. Every option should be explored.

We all want to live a long and happy life, but improved longevity comes with a price tag which many boomers won't be able to afford.