We can make hopeful projections about the behavior of capital markets, but do we know what interest rates, inflation or the price of Apple will be in 20 years? What will taxes be? What is the value of Social Security payments over our lifetime? Will cost-of-living adjustments continue?

Laurence Kotlikoff, a professor at Boston University and a longtime critic of the retirement planning industry, observes in his excellent new book, Money Magic, the difficulty (futility?) of the financial conversation when retiring baby boomers prefer to keep spending what they want regardless of their available income. Compare corporations, which depend on budgets and then spend accordingly. This simple script flip is a hard calculation and brings many rosy retirement scenarios to a screeching halt.

The financial conversation is the “what” of retirement planning, and it reveals the serious shortfalls in the industry that require attention right now:

• How to manage for the entire family—in a “unified managed household”;
• Tax planning integrated with investments;
• More precise healthcare estimates based on our clients’ actual health;
• Longevity estimates using that personal health data and family history; and
• Liquidity preparedness for big expenses and to minimize disruption.

Perhaps the best overall summary for the plight of today’s retiree is a white paper called “The Peak 65 Generation: Creating a New Retirement Security Framework.” It was written by Jason Fichtner, the head of the Retirement Income Institute at the Alliance for Lifetime Income.

“When people in the Peak 65 generation entered the labor market in 1980,” Fichtner writes, “60% of private sector workers relied on the protected income [from] a pension plan as their only retirement account, as compared to 4% in 2020,” and that “49% of Americans are ‘at risk’ of not having enough to maintain their standard of living in retirement.” That includes 29% of “high income” households.

The investment conversation. Here the topics represent the planning “how”—how the projected income and expenses will be funded. Like the financial conversation, this one involves considerable forecasting—most notably prognostications about the future performance of markets, interest rates and inflation. Besides investment advisory skill, advisors here can add alpha by talking about the impact of taxes and exchanging assets (for example, selling stocks to fund protected income or selling a home and investing the proceeds) and talk about the sequencing of asset sales (asset location).

We have to talk about taxes, which are for your clients likely the result of investment success. The vexing issue now, for clients and advisors alike, is how to withdraw proceeds from myriad IRAs, rollovers and DC plans. This, after all, is the first native defined contribution generation. How many of them will get that tax help? And from whom? TurboTax?

You’ll need to talk expenses, too. How many clients can outright fund their own healthcare, or long-term care, not to mention a new roof, tuition for a child or grandchild, eldercare costs for their aging parents, a wedding? The retirement service industry has come up with liquidity solutions, including generous credit lines against managed portfolios. That access will give some clients peace of mind and feelings of control. But the advisor has to be looking at the total balance sheet. How many do?

There are also benefits such as long-term-care policies tied to life insurance. I have one of those. A trust company CEO told me at lunch recently that his firm encourages local clients to secure a spot in a continuous care retirement facility with assisted living, a nursing pavilion and hospice care. That decision rescued my father when he was told he had pancreatic cancer. Some forms of protected income products leverage client cash better than bonds and add longevity protection. How about the ubiquitous qualified longevity annuity contract with a deferred income annuity (a QLAC with a DIA)? Or how about good old life insurance to leave cash to family members?

What about liberating home equity, one of the biggest assets in the typical household? The largest asset class in the U.S. is residential real estate. That’s about $40 trillion of value waiting to be unlocked, and some of it could make all the difference to one retiree’s balance sheet.

It’s worth asking: How many advisors use these tools and how many clients get the benefits? (It’s also worth mentioning that things like tapping home equity have to be safe, economical and carefully supervised.) If you don’t use all these tools, they’ll likely be used by the 20% of top performing advisors out there (who always inevitably emerge, according to the famous Pareto principle).