Do You Know Enough to Retire? Try This Quiz
Everybody would like to retire without diminishing his or her lifestyle. But do you really know how much income you’ll need in retirement to achieve this goal?
Most Americans don’t, according to a national “Retirement IQ Quiz” conducted recently by the Gallup Organization for Fidelity Investments, the big mutual fund firm.
Half of Americans expect to live as well in retirement as they do now, but almost two-thirds either underestimate or simply don’t know what income they’ll need, according to the quiz results and accompanying survey, administered to 724 individuals. The average score on the 10-question quiz was 67%, which Fidelity graded a poor D+. Predictably, older Americans tended to do better.
“There is a dangerous gap in Americans’ understanding of the financial realities of retirement,” said Lynn Conant, vice president and manager of Fidelity’s Los Angeles investor centers.
To see how you stack up against the national average, take the Retirement IQ Quiz yourself. To be sure, the quiz only touches the surface of the many important issues involved in retirement planning. In subsequent columns, we’ll discuss these in greater detail.
Good luck!
1. Including Social Security and all other sources of income, in general, about what percentage of their income would you say most people need to maintain their lifestyle after retirement?
A. Less than 20%
B. 20% but less than 40%
C. 40% but less than 60%
D. 60% but less than 80%
2. In general, about what percentage of their total retirement income do you expect that most people will receive from Social Security and pension plans?
A. Less than 20%
B. 20% but less than 40%
C. 40% but less than 60%
D. 60% but less than 80%
3. Your monthly Social Security benefits may be reduced below what they may otherwise be if you retire before age 65.
A. True
B. False
4. What’s the earliest age at which an individual, without being handicapped or disabled, can collect Social Security benefits?
A. 59 1/2
B. 62
C. 65
D. 67
5. Aside from the handicapped or disabled, only those who have had a paying job are entitled to a Social Security check.
A. True
B. False
6. Which phrase best defines Medicare?
A. A health program for poor people
B. A private health insurance program
C. An HMO or health maintenance organization
D. A federal health insurance program for the elderly
7. If a person switches jobs often during the working years, pension benefits ultimately received may be reduced below what they might be otherwise.
A. True
B. False
8. If a person retires early, that person’s monthly benefits from an employer pension plan may be reduced below what they might be otherwise.
A. True
B. False
9. A person’s benefits from an employer pension plan may be reduced if he or she also has an Individual Retirement Account.
A. True
B. False
10. Anyone under age 70 1/2 with earned income is allowed to contribute to an IRA.
A. True
B. False
Retirement Quiz Answers
1. D, 60% but less than 80%
2. C, 40% but less than 60%
3. A, True
4. B, 62
5. B, False
6. D, a federal health insurance program for the elderly
7. A, True
8. A, True
9. B, False
10. A, True
Scoring
Excellent: 9 or 10 correct
Good: 8 of 10
Average: 7 of 10
Below average: 6 of 10
Very low: less than 5
