An Interview with Retirement Planning Expert Henry Hebeler


Henry "Bud" Hebeler is a former Boeing executive who has been running a retirement planning company for over twenty years.

His company, Analyze Now (, provides information and tools that help individuals with retirement planning.  The company has helped thousands of people and is well respected among journalists and industry observers.

There are no sales motives or conflicts of interest with Analyze Now--just straightforward and objective retirement planning information.  

Annuity Digest: You were involved at an executive level with forecasting and planning at Boeing.  How and why did you decide to become so involved with personal financial planning and retirement planning?

Bud Hebeler: There was a need because of the poor quality of financial forecasting, budgeting and planning tools.  Tools at the time I retired were very primitive.  They are not fantastic today, but they were very poor twenty years ago. 

Boeing provided me with a great financial planner, but even the tools he used which were provided by his firm were pretty poor. 

At that time, I got on the Web and looked a bit further at the general state of financial planning tools and technology.  This research confirmed my initial assessment. 

I simply thought that I could have a larger impact than did at Boeing by acting as agent of change in the financial services industry.

A couple years after I started the Wall Street Journal contacted me.  They asked about state of industry retirement planning tools which were all providing different answers with huge variability between those outputs despite the fact that they used the same inputs.

Vanessa O’Connell put together full page spread on this issue in The Wall Street Journal.  Several years later Tom Herman from WSJ wrote another article just focusing on what is available on Web—another article about how bad state of the art was. 

These were major financial services firms providing tools with huge variability and making changes at glacial pace.

The mechanics were simply bad.

Financial Engines then came out with their simulation-based planning tools using Monte Carlo analysis.  The problem with their approach was the use of historical asset return data and assuming future will resemble past.  Your next twenty years may, in fact, be much different.  Besides the basic flaw of differentiating past from future, there are many technical problems with Monte Carlo analysis including lack of inflation correlation, assumptions about fund histories, etc.

My goal was simply to address what I perceived as a great need for more honest feedback and information.

Annuity Digest: What is your opinion on the advice the majority people of receive from financial planners?

Bud: Hebeler: It depends on your perspective. 

From the perspective of someone interested in doing no financial planning at all, it is very good.  A professional planner is a big help for non do it yourself folks even if their tools are not perfect.  A professional will not only help with a future budget but also with insurance and estate considerations.

If you are very sophisticated and want to do it yourself, you do not need a planner unless you want a different perspective or have need to address a technical issue that is, for example, trust or tax related.

Annuity Digest: Your resources seem somewhat geared towards the “do it yourself” crowd.  What advice would you give to a person who is seeking a financial advisor?

Bud Hebeler: First use a Certified Financial Planner (“CFP”).

I believe the very best CFPs come from the National Association of Personal Financial Advisors (“NAPFA”).  What really impresses me is what NAPFA applicants go through to become a member.  They put client interests first and foremost and act as a fiduciary.

As an alternative, you might seek an accountant with professional planning designation.

Do not use a broker for planning.  A broker will want to sell stock as opposed to index funds or annuities.  Don’t use an insurance agent because will just want to sell an annuity.

Seek objective advice from a fiduciary rather than a salesperson.

Annuity Digest: What are your preferred sources of financial information?

Bud Hebeler: I subscribe to about twenty different publications.  I really like the Wall Street Journal –it is my number one source.  USA today often has very good financial articles.  If you are retired, Kiplinger’s Retirement Report and Bottom Line Retirement are great.  Bottom Line Retirement is a monthly newsletter that is inexpensive and talks about a number of different topics including health and taxes.

I look for articles written by some of my favorite journalists like Kelly Greene, Glen Ruffenach, Susan Garland, Mary Beth Franklin, Lynn O’Shaughnessy, Chris Farrell, Tara Siegel, Walter Updegrave, Suzanne Woolley, Sandra Block, Jonathan Clements, Jonathan Pond, Marion Asnes and many others.

In terms of books, I like anything that John Bogle has written, Swedroe’s What Wall Street Doesn’t Want You To Know, The Black Swan, The Empire of Debt and I.O.U.S.A. (which was made into a movie).

One very important issue that does not receive adequate press is the issue of the low savings rate in the United States.

In 1985 the savings rate started to decline and continued declining over the subsequent 20 years till reaching zero. 

I developed an analysis of the return required to recover from this chronically low savings rate over next 20 years?  The answer is everyone would have to save 23% per year with 8% continuous return, both of which obviously are impossible. 

The point is that there are two decades of savings that are simply not there, and it is next to impossible to make up for this.  No one really talks about this, yet it is implicit in the debt situation.

Government, industry and finance all want people to spend.  Industry suffers without consumer spending.

Also, our population is aging, fertility rates are lower and private pensions are declining.  Public sector pensions and labor unions are strong. 

The gist is that we should have been saving more and not less over the past 20 years. We are in situation where there is a huge savings deficit that older people will start to recognize.  The reality will be painful for many people who realize they need to save more.

I have talked to people earning over $300,000 per year and have no savings and no interest in saving.  What do you in this situation?

Annuity Digest: What are your thoughts on the current financial crisis, specifically as it pertains to retirees and those approaching retirement?

Bud Hebeler: Try to save money, invest cautiously and diversify.

Annuity Digest: From your perspective, what are the most pressing risks facing retirees in the current environment?

Bud Hebeler: Inadequate savings is top of the list.

Inflation and impact of medical costs are major risks.

Surprise events are real risks.  Most people have financial problems with relatives such as elderly parents or a divorced child.  These are major expenses that you simply cannot forecast.

People also spend or draw-down their retirement savings too much and too early.

Annuity Digest: What are your thoughts on life-cycle investing and the notion of consumption smoothing?

Bud Hebeler: This has many similarities to the approach I use, although my approach is more conservative and is somewhat skeptical in the use of past statistics to predict future.  I like to see people compare alternative ideas and choose the better one for the future they envision.  That’s why my comprehensive programs on have two independent programs running in parallel to compare differences.

Annuity Digest: Your website provides a free calculator for evaluation of immediate annuities.  Can you share some of your thoughts on annuities?

Bud Hebeler: I really like the idea of having a reasonable amount of money in inflation-protected immediate annuities.  Inflation protection is important because higher levels of future inflation are almost inevitable in this country due to our poor fiscal situation.

These annuities should be laddered to hedge interest rate risk and receive larger payments as you age.  Also, people naturally benefit more from larger fixed income exposure as they age. 

One general rule of thumb I use with a fixed annuity is to only spend your age as a percentage multiplied by the after tax payment.  For example, 75 year old person with a $1,000 monthly payment would spend $750 and save the rest. 

Originally my personal goal was to buy an inflation-protected immediate annuity every other year for ten years.   But now it’s harder to find these.

Some people say that a person with my level of resources should not purchase an annuity, but since I have relatives who have great longevity I think this is a very sound decision and a good bet with the insurance company.

Even a person with a reasonable amount of money who has a bequest motive or wants to leave money for their heirs can do better with annuity than any other financial vehicle if they live a relatively long life.

Another reason I like annuities is that they take the business of investing out of the equation.

Annuity Digest: What piece of financial advice would you provide to the person who is five years from retirement?

Bud Hebeler: Developing a financial plan should be priority number one.

Put together a plan and do some analysis of where you are at and whether you have adequate funds for retirement.

You might discover that you have to put 50% of income in savings to have adequate income in retirement and avoid huge shock.  Do the plan yourself or have someone do that for you. 

Adequate retirement savings is an absolutely critical issue.  I would say it is more important for one to have adequate retirement savings than putting kids through college.  There are many ways to get through college but no other ways to get income when retired.

Annuity Digest: What piece of financial advice would you provide to the person who has been retired for five or ten years?   

Bud Hebeler: Again, make sure you are not spending too fast.  Many are spending money too fast and will deplete resources too fast.

Take a look at life expectancy or longevity calculator at

Plan realistically for longevity risk—many people will live to over 100.

Longevity annuities are a very interesting idea.  Not a bad bet to take that you might live much longer than expected.

The best and cheapest long-term guaranteed income payments you can receive are through Social Security.  Delay taking Social Security until age 70 or at least full retirement age in order to max out on with Social Security.   The survivor benefits of Social Security are great.

Annuity Digest: Any additional thoughts, comments you would like to address?

Bud Hebeler: We enjoy what we do and enjoy being of service.  Neither I nor our volunteers have ever taken any compensation.  Compensation is thank you notes.  We have enjoyed good lives and incomes while working so now we use our efforts help the community.

Key Phrases Manual: 


As a matter of fact, Bud is probably the perfect person for this question.

There are some free tools/calculators that he provides on his website that answer whether a single person should take Social Security and whether a married couple should take Social Security at 62, 66 or 70.

Take a look at Analyze Now under the "Free Programs" menu option.

Bud may want to comment as well.