By Cleona Kinahan M.SC CFP® QFA FLIA
Here’s what nobody tells you about the hidden phases of retirement planning: retirement isn’t failing because people don’t have enough money. It fails because they’re using a one-size-fits-all plan for a 30-year journey with four completely different financial terrains.
The financial services industry sells retirement as a single event – you hit 65, access your pension, and off you go. But in 15+ years of working with Irish retirees, I’ve watched that oversimplification destroy otherwise solid plans.
Retirement isn’t one phase. It’s four distinct stages, each requiring different strategies, different spending patterns, and different emotional navigation. Miss this, and what works brilliantly in year one becomes a crisis in year fifteen.
Why Standard Retirement Advice is Dangerously Incomplete
Most financial advice treats retirement like flipping a switch. You’re working, then you’re not. You accumulate, then you withdraw. Simple, right?
Wrong.
In our practice, we see consistent patterns: early retirement spending differs dramatically from later phases. Travel, home renovations, helping adult children – the money flows out differently than most people predict. Then spending stabilises, healthcare costs rise, and eventually potential care needs emerge.
The 4% scaled withdrawal rule assumes steady spending for 30 years. But your life won’t be steady for 30 years.
The Four Financial Seasons of Retirement: What Each Phase Actually Requires
Phase One: The Liberation Years (1-5)
This phase feels like finally being able to breathe. You’ve got energy, health, freedom, and a list of things you’ve postponed for 30 years.
But here’s what catches people: spending psychology changes overnight. That scarcity mindset that helped you save €600,000? It either evaporates (dangerous) or paralyses you (tragic).
Last month, I met with a retired engineer with combined assets of €820,000. He wanted to take his wife to New Zealand – something they’d talked about since their 30s. The trip would cost €18,000. He was tormented. “Can we afford this?”
When we modelled his plan properly, he could spend substantially more annually without depleting his capital. But he couldn’t see it because he was using a one-size-fits-all approach.
What Phase One requires financially:
- Pension consolidation (those multiple PRSAs and occupational pensions need organisation)
- ARF vs annuity decision (this isn’t one-size-fits-all)
- Investment horizon recalibration (you’re investing for 30 years, not 5)
- Drawdown strategy that accounts for phase-specific needs
Phase Two: The Reckoning (6-12)
The novelty wears off. You’ve done the trips, fixed the house, helped the kids. Now what?
Three retired professionals – a solicitor, an IT director, and a GP – used nearly identical language in separate first meetings: “I don’t know who I am anymore.” Two had over €800,000 in combined assets. Money wasn’t their problem. Identity was.
Financially, Phase Two is when poorly designed plans show cracks. The sequence in which you withdraw from different asset types during market volatility matters enormously – but most people have no withdrawal sequencing strategy at all.
What Phase Two requires:
- Sustainable spending rhythm (typically lower than Phase One)
- ARF rebalancing strategy protecting against sequence-of-returns risk
- Healthcare cost planning as premiums rise
- Purpose planning (not financial, but essential)
Phase Three: The Slowdown (13-20)
Energy levels drop. That trek through Connemara you managed at 65? Not happening at 78.
Spending on travel and activities typically falls, but healthcare costs rise. This is the phase where you might need home modifications, regular medical care, or additional support.
And this might be your last window to get estate planning right while you’ve got full cognitive capacity.
If you own property, rental assets, or business interests, this phase is decision time. Gift strategically using annual exemptions (€3,000 per child per year, €400,000 lifetime parent-to-child threshold per Revenue guidelines¹) or leave it all to probate and watch Revenue take 33% of everything over those thresholds.
What Phase Three requires:
- Estate planning overhaul (will, enduring power of attorney, beneficiary designations, tax-efficient wealth transfer)
- Healthcare cost modelling
- Property decisions (downsizing, strategic gifting)
- ARF distribution adjustments
Phase Four: The Care Years (20+)
Let’s be direct: nursing home care in Ireland can cost well in excess of €1,000-1,500+ per week.² That’s €52,000-78,000+ annually. If you need five years of care, you’re looking at €260,000-390,000.
Most people catastrophically underestimate this.
The Fair Deal scheme (Nursing Homes Support Scheme) helps, but here’s the reality: you’ll contribute 80% of your assessable income plus 7.5% of assets annually. Your family home is capped at three years of contributions. Other assets aren’t.³
Over eight years in a nursing home, your ARF could be decimated – and there might be nothing left for your spouse or children.
What Phase Four requires:
- Long-term care cost modelling
- ARF management strategy accounting for Fair Deal asset assessments
- Spousal protection planning
- Final estate wishes documentation
The Biggest Mistake Smart People Make
The biggest mistake we see? People retire, set up a monthly ARF withdrawal, and never touch it again. Fixed income, just like their old salary.
But your ARF isn’t a salary. It’s a portfolio that needs active management through different market conditions and life phases.
The sequence in which you withdraw from different asset types during market volatility can significantly impact how long your portfolio lasts. Sell equities in a down market to fund living expenses, and you lock in losses you’ll never recover.
The fix: Build 3-5 years of living expenses in cash or short-term bonds within your ARF. When markets crash, draw from that buffer instead of selling equities at a loss. Replenish the buffer when markets recover.
Where Do You Start?
Retirement planning isn’t a one-time event. It’s a rolling strategy that adapts as you move through these hidden phases of retirement planning.
Get your pensions consolidated so you can actually see what you’re working with. Model cash flow for 30 years accounting for phase-specific needs. Understand the tax implications of different drawdown strategies. Make sure your estate plan reflects your actual wishes, not a will you wrote in 1998.
But most importantly? Make decisions based on your life, not someone else’s retirement Instagram feed.
You’ve spent decades building financial security. Now you need a plan that lets you actually enjoy it without constant worry that you’re doing it wrong.
If you’re ready to map out what each phase looks like for your specific situation, let’s have a conversation about where you are and where you want to be.
Book a quick chat: Book a Quick Chat
For personalised advice on pension and retirement planning, arrange a Quick Chat with the O’Leary Financial Planning team or email advice@olearys.ie.
Disclaimer: This content is for informational purposes only and does not constitute financial or legal advice. Always seek professional guidance before making decisions.