The arrival of $4 per gallon gasoline, not to mention other skyrocketing energy costs, seems likely to bring a whole new branch of mathematics to retirement planning equations.

Inflation has always been a factor in any financial plan worth its salt. But most of the time inflation is viewed as something that slowly and steadily rises over time. When inflation starts to gallop, however, you have to start looking at it as a horse of a different color, so to speak.

What is worrisome here is that although gas prices may moderate somewhat in the future, the point they return to is bound to be much higher than what we have historically been used to. So it’s obvious that one way or another, gasoline is going to be taking a bigger bite out of retirees’ income.

But that’s not all. Anyone who’s been to a super market lately, and who knows how a price scanner works (not everyone does, after all), knows that escalating food prices are giving energy prices heavy competition for what’s going to take a bigger chunk out of consumers’ wallets.

Even now, many people are having to make hard choices when it comes to their weekly/monthly budgets. Do I drive or do I eat? Or do I do both, but take smaller portions of each?

So, yes, it would be nice if the insurance business could just keep dreaming about boomers and other pre-retirees taking wads of their disposable income and putting it into annuities, long term care insurance, life insurance and all the other goodies available from the industry. But where is that money going to come from, I wonder, when many people (boomers among them) are being faced with hard choices now?

And let’s not forget that it’s only in the last couple of years, really, that personally-borne health care costs have even started to be mentioned as a significant factor in post-retirement income plans.

Some studies have said that retirees should figure on having about $200,000 to take care of these health costs in retirement. This obviously is not a negligible figure, but what really caused me to groan when I first saw it was the fact that so many people in this country have nowhere near that amount saved to live on in retirement, much less having a couple of hundred grand solely devoted to taking care of health care expenditures.

Looking at all of these factors from the vantage point of the new math, one comes up with an unavoidable conclusion: many people are going to have to stretch their money to meet current basic needs as well as any future projected needs.

For the life insurance business this should similarly lead to an unavoidable conclusion: those so-called combination products that are in the development pipeline need to be put on a much faster track.

For one thing, the ability that a single product might have to transition from, say, life insurance to LTC, or annuities to LTC, or any other such permutations spell value to consumers. They go a long way toward overcoming the resistance that people have to putting money into products from which they may never see a payback.

Yes, you and I know that that is what insurance is all about. But millions of people out there have resisted LTC insurance, for example, because they may never use it and all those premiums will have been paid for naught.

Skyrocketing energy costs should be sending the equivalent of a smoke signal to the insurance business now to get moving on creating products that will fit into the shrunken budgets of retirees today and in the future. Today’s gas pains should have the industry scurrying to develop future remedies now.