The changing landscape for retirement began to become apparent even before 2008, but that is when many retirees changed from "being confident and feeling they could leave something for the next generation, to being humble," observes Peter Maris, CFP, principal at Resource Financial Group in Wilmette, Ill. "They are becoming aware they may outlive their finances."

Maris and others now use Monte Carlo analysis tools, which can show where people are financially, where they want to be in a number of years and how they can get there. "The way to get the conversation started with a client is to ask about their feelings," he says. "For some clients, the advisor may have to educate them to the reality of their situations. Most people do not want to retire and then have to struggle financially-they want financial dignity."

An option is to transfer some of their risk to products such as an annuity with a special rider providing a guaranteed income for life. "One of the things that can throw a monkey wrench into planning is the increasing cost of long-term care. In addition, long-term health care insurance premiums are anticipated to rise as much as 44% in 2011," warns Maris. "We have to educate clients to the reality that we are all going to have to spend a little less, because we are going to live longer."

Maris, who says most of his clients "are gray," runs their financial analyses based on their living to be 100. Long-term care insurance also is considered a key by Jeff Motske, CFP, president and CEO of Trilogy Financial Services in Huntington Beach and Calabasas, Calif. Motske teaches other advisors how to establish a successful practice.

"If you have a couple in their 60s now, chances are one of them will live to be 90," Motske says. "They need long-term care to take care of one of them if there is illness so that the spouse is not left destitute. The client also may consider tapping into life insurance death benefits if they have to cover big expenses.

"The point is, you have to ask the questions to discover how your clients feel. If they do not know, you start to probe," he advises. "The goal is to get them to relax financially so they can move to the next chapter in their lives."

Planning for a linear rate of return on investments during retirement has fallen by the wayside in recent years, replaced by a changing nature of income more likely to fit the client's longer life, say some advisors. Kimberly Foss, CFP, CPWA, president of Empyrion Wealth Management in Roseville, Calif., also uses Monte Carlo planning tools. She specializes in helping older clients and women in transition. "With this tool, we have a much more concise ability to know what a client's terminal net worth will be and we can zero in on a realistic basis to determine the client's probability of outliving his or her money," she says.

Different advisors approach the solutions in varying ways. In her planning, Foss includes a rate of inflation of 3.5%, a point above the current level. Adding a mixture of stocks and bonds that produce a blended rate of return of 6%, to be conservative in the anticipated rate of total return, proves to act as a hedge in unforeseen expenses as well.

"Then we try to plan for absorbing whatever unexpected costs might come up in the next 20 to 30 years," she adds. "We are sure not to deviate off the original plan, but to review it frequently to see what has changed and how to maintain the right direction for the client. This provides a foundation to plan for the next 20, 30 or 40 years and allows clients to financially make their own decisions in retirement.

"It is imperative to be proactive for inflation. Keeping short-term bonds for slow and steady income and hedging against inflation should interest rates rise. In addition, considering international stocks to diversify globally with an eye to dividends," she says.