One of the biggest variables that confront people when planning retirement is their life expectancy. Some folks like to use the life expectancy of their age group or the life expectancy numbers that exist for a person born today. But this can be very misleading and can result in retirees running out of money in retirement.

The power of growing dividends over time continues to be underestimated by many investors. Many are concerned with another decade of slow growth and low to negative equity returns. However, one way to prepare for another decade of slow economic growth is to invest in dividend paying stocks that have shown they can weather tough economic times and even increase their dividends while it happens.

One of my favorite dividend growth stocks has been Coca-Cola (KO). I have been recommending them for the last three years as a solid edition to retirement portfolios. Coke has had an incredible run over the past year with its stock price up 23%. Over the past two years it is up 40%.

It’s always an interesting experiment to ask people how much money (in today’s dollars) they think they will need to retire comfortably. I’ve found that a lot of folks like to throw out the nice, round figure of $1 million. It’s a reasonable guess, but usually it’s just that: a guess. I wanted to dig deeper and figure out just what it takes to retire comfortably at age 65.

When looking to build a long-term portfolio of stocks that pay high dividends, investors usually come up with a mix of stocks that either have high dividend yields or high dividend growth rates. It is difficult to find good companies that have both. This means that there is often a choice to be made. All else equal, should one invest in the company that has that enticing high dividend yield, but a low dividend growth rate, or does one exude patience and invest in the company with a relatively low yield, but a high dividend growth rate? To help answer this question I looked at two companies that offer these different alternatives: AT&T (T) and Automatic Data Processing, Inc. (ADP)