The Three Phases of Retirement Spending in Ontario

Most retirement projections are built on a flawed assumption: that spending remains constant throughout retirement. A flat annual income need, adjusted for inflation, running for 25 or 30 years. It looks clean on a spreadsheet, but it does not reflect how real Ontario retirees actually live. In reality, retirement spending follows a predictable arc with three distinct phases — each with its own financial profile, emotional character, and planning implications.

Understanding these phases can help you build a retirement plan that genuinely matches your life, rather than one that optimizes a number that has little to do with how you will actually spend your years.

Phase One: The Go-Go Years

The go-go years are the early years of retirement — typically the first ten to fifteen years, often from the mid-60s into the mid-70s. This is when retirees are healthiest, most mobile, and most energetic. For many, these are the years they have been looking forward to for decades.

Spending in the go-go phase is characteristically high — often higher than pre-retirement spending, not lower. Travel is common. Home renovations long deferred during working years get done. Visits to children and grandchildren who may live across the country or abroad add up. Golf, fitness, dining out, hobbies that require equipment and time — all peak during this phase.

This flies in the face of the conventional planning assumption that retirement spending is lower than working income. For many Ontario retirees, the early years of retirement are not a period of frugality. They are a period of active, intentional enjoyment of the life they spent 35 years working toward.

The planning implication is significant: your plan needs to fund this phase generously. Underestimating go-go spending is a common error that leaves retirees feeling like they cannot afford the retirement they imagined, even when their financial picture is sound.

Phase Two: The Slow-Go Years

Somewhere in the mid-70s for most people — though the timing varies considerably by individual health, genetics, and lifestyle — a natural deceleration begins. This is the slow-go phase.

Travel does not stop, but it becomes less frequent and often less adventurous. Long-haul international trips may give way to shorter domestic travel. The pace of activity moderates. Dining out, hobbies, and entertainment remain important, but the intensity and frequency begin to ease.

Spending in the slow-go years typically decreases in discretionary categories — travel, entertainment, major purchases — while remaining relatively stable in core categories like housing, food, and transportation. The net effect for most retirees is a meaningful decrease in overall spending compared to the go-go years, sometimes described as a "retirement spending smile" where the dip occurs in the middle years.

The planning implication: this is often the phase where financial projections look most comfortable, because spending has eased and investment portfolios have (hopefully) continued to grow. It can be tempting to view this as confirmation that the plan is working. What it actually represents is a transition period leading toward the phase where healthcare costs begin to rise.

Phase Three: The No-Go Years

The no-go years arrive when mobility becomes limited, independence decreases, and healthcare needs begin to dominate the financial picture. For most people, this phase begins somewhere in the late 70s or 80s — though again, timing is highly individual.

Travel and discretionary recreation spending fall sharply. But total spending may not decrease as much as expected, because healthcare costs rise to fill the gap. Prescription medications, home care support, physiotherapy, mobility aids, dental care (not covered by OHIP), hearing aids, vision care, and potentially long-term care costs all emerge as significant expenditures.

Ontario's long-term care system provides some publicly subsidized options, but access is not guaranteed, wait times can be lengthy, and the co-payment required for a long-term care bed (the "accommodation cost") is not trivial. As of 2025, the basic accommodation rate in Ontario long-term care is several thousand dollars per month. Private assisted living or retirement home options are considerably more expensive — often $4,000 to $8,000 per month or higher for premium facilities in Southern Ontario.

Home care as an alternative to institutionalization is increasingly common, but it too carries real cost. A live-in caregiver or regular home support adds substantially to a household's monthly expenses.

The planning implication for the no-go years is often underestimated: while discretionary spending falls, care costs may more than offset those savings, particularly for individuals without extended health coverage, those with serious chronic conditions, or those who want access to higher-quality private care options.

Why Linear Projections Miss the Mark

When you model retirement as a constant spending level inflated at 2% annually for 30 years, you systematically underestimate go-go years (when you actually spend more), overestimate slow-go years (when spending dips), and underestimate no-go years (when care costs spike).

The result is a plan that may technically show adequate funding over the full 30-year period but leaves the retiree feeling underfunded in the phase they most wanted to enjoy, and potentially underprepared for the care costs at the end.

A better framework models retirement spending in three distinct buckets — go-go, slow-go, no-go — with realistic assumptions for each phase. It also addresses long-term care risk explicitly, either through insurance solutions, earmarked reserves, or family planning.

Integrating the Three Phases Into a Real Retirement Plan

Building a retirement plan around the three phases means asking different questions than traditional planning. How much do you genuinely want to spend in the go-go years? What would you be comfortable with in the slow-go years? What is your plan if you require significant care — and have you had that conversation with your family?

At Pineault Wealth Management in London, Ontario, Marc Pineault builds retirement plans that engage directly with these questions — moving beyond the flat-spending model to create projections that reflect how real retirement life unfolds, and building income strategies that front-load resources when retirees most want to use them.

Retirement is not a single financial problem to solve. It is three distinct financial chapters. Planning for all three is what makes the difference between a retirement plan on paper and a retirement plan that actually works.

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This article is for educational purposes only and does not constitute personalized financial advice. Please consult a qualified financial planner before making any financial decisions.