If only retirement were as easy as the TV sitcom Frasier makes it seem. For former cop Martin, retirement meant sitting in his favourite chair in his well-to-do son’s penthouse.

In real life, retirement looks a lot different. Whereas Frasier made retirement seem like a single point in time, it is anything but.

“Retirement is a time of transitions,” says Tina Di Vito, director of retirement solutions at Bank of Montreal’s private client group in Toronto. “Advisors need to have a different conversation with their clients — one that goes beyond finding out what they’d like to do in retirement and financial projections. We are accustomed, as advisors, to rely on questionnaires, forgetting that our clients need be looked at as a family unit. We need to probe deeper into events shaping their lives in retirement.”

In his book Buying Time (John Wiley & Sons Canada Ltd.), Daryl Diamond, a specialist in retirement income planning and president of Diamond Retirement Planning Ltd. in Winnipeg, lays out the most common events:

> accommodating adult children;

> dealing with aging parents;

> becoming a caregiver;

> receiving an inheritance;

> change in health of a family member;

> disability of a partner;

> loss of a partner.

These events point to just how dynamic the post-retirement planning process can be. “It’s like trying to put together a jigsaw puzzle when the picture on the box keeps changing,” says Diamond. “There is no formula — there are simply too many variables.”

It may be impossible to know what the final stage of retirement will look like, but we do know the picture will take shape over three distinct phases. There are strategies to make the transition from one to the next as seamless as possible.

> The Early Years. This is the honeymoon phase, which generally lasts about five years. Both partners are healthy and active, and want to do all the things they’ve put off. Not surprising, it’s also the most expensive time in retirement.

“It’s a real balancing act,” says David Christianson, a fee-only planner at Wellington West Total Wealth Management Inc. in Winnipeg. “As an advisor, my goal is to help people quantify their recurring expenses to ensure their income will be adequate over the long term.”

Christianson recommends creating a spending plan so retired clients aren’t left tallying up after the fact to determine whether the savings account balance has gone up or down. A retired person does not have the same opportunity to make up for overspending, and debt is much more difficult to eliminate for those on fixed incomes.

“It’s our job to make clients aware of the impact of spending,” says Di Vito. “We are good about advising on asset allocation and investment risk. But we shouldn’t allow clients to spend more than is reasonable for their portfolios.”

Christianson also suggests taking stock on a quarterly basis, clearly differentiating between one-time expenses and recurring expenses, and budgeting accordingly. “We are always asking: ‘Is income adequate? Are there unusual expenses coming up? Are you running at a surplus?’ Nobody likes surprises — least of all, us,” he says. “We want our clients to have the confidence they need to transition into the rest of their retirement.”

> The Middle Years. This is the phase that was plan-ned for in the buildup to retirement. All of the pension income has kicked in and clients are falling into a quasi routine. They’ve done the things they really wanted to and they’ve learned what they enjoy doing in retirement. Spending has become more normalized and they are living on less than the income generated each year. Capital is continuing to accumulate.

This is the time to start talking about assisted living, says Di Vito: “This doesn’t necessarily mean a nursing home and huge health-care expenses. It can simply mean housekeeping or Meals on Wheels. But it’s a good idea to start a savings program for care.”

That can mean budgeting or looking to growth products.

“When a client is retired,” she adds, “we tend to focus on investments that create a steady cash flow, forgetting that they still may have a 30-year time horizon.”

Christianson undertakes comprehensive annual updates of each client’s financial plan. “We look at resources and do a new measurement of achievable retirement income for the rest of their lives. We want to see that projection increasing every year. So, if a person is retiring at 60 and we are projecting they will have $80,000 a year, inflation-protected, at 65, I’d like to see that be $100,000 a year projected forward, because that way we are keeping pace with inflation and they are still in great shape.”

@page_break@> The Later Years. This is a time when lifestyle slows down. With travel and other activities curbed, daily expenses decrease. But this is also a time when one or both spouses may need care.

“If they’ve been living on relatively low incomes, provincial government programs will cover most of the care expenses,” says Christianson. “For those with higher incomes, you have to be sure they have enough to draw on.” IE