Spotlight: Bud Hebeler
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Most planners use a default value of 3 percent to represent the inflation results including the Great Depression. The average inflation starting right after the Great Depression is about 4 percent. Inflation in the first 20 years of a 1965 retiree was 6.3 percent. Even with retirement in 1948, the first 20 years, inflation was 4.3 percent (annualized). That's why I don't like to see people use historical returns along with 3 percent inflation.

Savings myths and realities

• Percentage you must save. • Saving more if you're behind. • Achieving $50,000 income. • What about inflation? • Social Security shortcomings. • Is 4 percent withdrawal safe? • Changing the investment mix. • Pensions not enough. • When to take Social Security.

If your financial source says that you need only a fraction of that result, start asking a lot more questions.

It's often common for financial sales people to say how you can be a millionaire if you save relatively small amounts of money over long periods. They (intentionally) fail to point out that $1 million in the future will be far short of what $1 million is worth today.

In your book, you cite a half-dozen retirement planning myths. One is that Social Security is inflation-adjusted. Social Security does have a cost-of-living adjustment. Why isn't this sufficient to cover inflation?

A retiree's inflation rate is about 0.2 percent higher than the normal Consumer Price Index. When you retire, you have medical expenses that continually increase. You have more need for this service and the unit cost is increasing much faster than inflation.

So, you've got two things working to really accelerate the amount of money that you have to spend for medical expenses. That's the primary reason. The dollar amount of our checks this year is actually less than it was last year. The reason is we have a Medicare Part D premium deducted from our Social Security checks. Well, Medicare costs have been going up so fast and so high that it completely offset the increase from the standard inflation rate.

So I would say Social Security is not really adjusted. The government sends every working person a report about what you're going to get from Social Security, but it doesn't tell you that your check is going to be reduced by Medicare parts B and D.