When it comes to investing for retirement, many people view the day they quit as their finish line. But in reality, the financial demands of retirement investing only get more challenging after you retire. If you want to make sure your money will last as long as you do, you have to take a closer look at exactly how your retirement is likely to pan out.

Time doesn't stand still
Most people think of retirement as a single, final period of their lives. But investing as if your entire retirement were exactly the same is seriously flawed. Especially as life expectancies rise and medical science advances, retirees need to plan for 30 years or more in retirement. More importantly, what you do during the first part of your retired years may be completely different from your activities later on. Unless your financial plan accommodates those changes during your retirement, you may find yourself unprepared after you've been retired for a few years.

To look at this further, it's easiest to divide retirement into three distinct phases. Let's take a look at each of them, and the demands they make on your money.

Phase 1: The active life
For many, retirement is a chance to do the things you never had enough time to do earlier in life. Whether you want to travel to exotic locales, play golf, or spend more time with your family, the first five to 10 years of your retirement can introduce some novel financial challenges.

The best time to prepare for those years is actually while you're still working. Diverting some of your final paychecks to a leisure fund will help you reduce the need to figure out how to fit expensive activities into a more constrained retirement budget.

Beyond that, though, your investments should tackle both your need for income and the desire for growth to help meet future money demands. The mix of stocks, bonds, and other assets that you choose depends on how your retirement nest egg compares to your personal expenses, but at this early stage, keeping some money in stocks is essential.

Good ideas right now include ExxonMobil (NYSE: XOM), which is struggling from a general disdain for energy stocks in the aftermath of the Gulf oil spill. Its dividends yield nearly 3% at present. It's also a good value, with an earnings multiple of less than 14, despite sharply reduced profits last year compared to 2008's oil boom.

Similarly, Merck (NYSE: MRK) and Eli Lilly (NYSE: LLY) pay healthy dividend yields near 5% and 6%, respectively, and both have P/E ratios well below 10. Uncertainty in the health-care industry and concerns about future drug pipelines partially justify these cheap valuations, but there's some growth potential if these companies succeed in coming up with new drugs to replace their existing cash cows.

Phase 2: Winding down
As you age, you may decide at some point to start winding down from your freewheeling lifestyle. That can actually reduce your net cash outlays, although you're more likely to see medical expenses starting to drift upward.

Individual stocks like those above can still help you, but if you don't want to spend as much time thinking about your investments, a good set of mutual funds or ETFs can serve you well. A mix of iShares Barclays TIPS Bond ETF (NYSE: TIP) and Vanguard Total Bond Index ETF (NYSE: BND) combines income-production with some protection from the impact of inflation. Combine that with SPDR S&P Dividend ETF (NYSE: SDY), which invests in stocks like Lilly and ExxonMobil, as well as others with long histories of strong dividends, and you can implement a successful, low-maintenance asset allocation strategy.

Phase 3: Looking to the future
The hardest thing to plan for is your own death. You don't know when it will happen or under what circumstances. From a financial standpoint, it's especially tough to plan for such a wide range of possible outcomes.

That said, most people fall into one of two categories. If you'll probably need to spend most or all of your remaining assets, liquidating risky investments and moving to cash and other safe assets is the best move to protect yourself from bad markets. But if you have enough assets to leave some to your heirs, then some estate planning may actually encourage you to invest more aggressively. Leaving money in Roth IRAs and holding onto long-held low-basis stocks may save your heirs a fortune in taxes after your death.

Have a plan
Whether you're already retired or just preparing for retirement, it's smart to think of retirement not just as a single period, but in distinct stages. That way, you can make plans that will work for the rest of your life.

Planning for retirement is easier than you think. Let Fool retirement expert Robert Brokamp show you how to survive a late start on your retirement saving.

Fool contributor Dan Caplinger is hoping for an early, frugal retirement. He doesn't own shares of the companies mentioned in this article. The Fool owns shares of Vanguard Total Bond Market ETF and iShares Barclays TIPS Bond ETF. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy ages gracefully.