Throughout our careers, we stash away money for retirement. Then that fated day arrives when we push away from the desk and retire. Perhaps we receive a gold watch or other symbolic appreciation of our efforts. Perhaps we trade in our calculator and stapler for a racquet and a nine iron.

From this point of view, we have two life stages: Pre-retirement and post-retirement. But as people are living longer now than they have in previous generations, it’s become important to view our lives in three phases: Pre-retirement, young retirement and old retirement. In the third phase, we might trade in our racquet and nine iron for a compartmentalized pill dispenser box and, quite possibly, a walker.

This latter phase might not last as long as the first phase – or even the second phase – but it is an expensive phase and one for which you need to plan accordingly. In the first stage of retirement, people are generally young and healthy enough to travel extensively, maintain a second home and enjoy luxuries such as yachting and golf club memberships. It’s easy to think that during the early stages of retirement you might spend more money.

During the second stage of retirement, most people participate in fewer activities, seek less entertainment and even tend to eat out less. However, health care expenses and even housing expenses – including assisted living and long-term care – tend to increase. In fact, according to the Employee Benefit Research Institute, Medicare only covered 62 percent of health care costs for seniors in 2010. Retirees paid for 12 percent of expenses out-of-pocket and private insurance picked up 13 percent. The following are a few stage-two retirement budgeting concerns you might need to address.

• Transportation – If you reach a point when you can no longer drive, will you have the means to help you shop for groceries and go to doctor’s appointments?
• Housing – If you are no longer able or willing to mow, rake and clean gutters, will you have room in your budget to pay for lawn maintenance services? What about house cleaning and cooking?
• Health Care – According to a study published in the “Journal of General Internal Medicine,” out-of-pocket medical spending in the past five years of life left one in four American seniors bankrupt.
• Long-Term Care – According to the Department of Health and Human Services, seven out of 10 Americans who reach age 65 will need long term care at some point in their life; and four out of 10 will need 24-hour skilled nursing care. It’s also interesting to note that because wealthier seniors tend to live longer, they are more likely to need long-term care services toward the end of life.
• Survivor Income – Remember that one partner will likely survive the other. Have you calculated the income each survivor would receive if the other passes first? (Hint: In many scenarios, a surviving wife will receive less).

It’s important that you plan for your entire retirement – not just the fun stage when you’re finally free of career obligations and are able to play full time. Consider utilizing strategies to reserve part of your assets for the later stage of your golden years, such as those offered by a deferred income annuity. Also, consider purchasing insurance with long-term care benefits while you’re still young and healthy enough to qualify.