Think your stuff when it comes to retirement? Big if true, because in line with a recent report, the everyday U.S. adult cannot pass a temporary retirement fluency test.
TIAA Institute, a think tank throughout the financial services company TIAA, distributed a five-question quiz on retirement basics to almost 4,000 adults in January — and on average, respondents scored just 40%.
The proportion of those who answered zero questions appropriately (19%) was regarding the same as people who answered 4 or more appropriately (17%).
Perhaps unsurprisingly, higher retirement confidence correlated to higher test scores. Twenty-six percent of respondents who answered 4 or more questions appropriately said they were very confident that they may need enough money to live comfortably throughout retirement. Only 7% of people who weren’t confident the least bit achieved the similar rating.
People closer to or already of their retirement years also tended to perform higher than people who weren’t. Members of the “Silent Generation,” born roughly between 1928 and 1945, answered 50% of the questions appropriately on average. The newly minted adults of Gen Z, nonetheless, only answered a median of 28% appropriately.
Test your knowledge
Are you fluent in retirement? Below are the five exact questions (and answers) from the TIAA Institute survey.
1. Which statement about Social Security is fake?
A) The amount someone receives in Social Security benefits depends upon his/her earnings throughout the last two years of full-time employment.
B) A worker receives Social Security profit payments if he/she becomes disabled before retiring.
C) Social Security profit payments will proceed as long as an individual is alive, regardless of how long he/she lives.
D) Don’t know.
2. Susan worries about living an prolonged life and running out of money. What’s top-of-the-line ways for her to handle that possibility?
A) Buy an annuity.
B) Buy life insurance.
C) There could also be nothing she is going to have the ability to do about this.
D) Don’t know.
3. On average, Medicare and other government programs cover how much of an individual’s health care expenses in retirement?
A) Over 90%.
B) About 2/3.
C) About 1/2.
D) Don’t know.
4. Latisha plans to start saving for retirement by setting aside $2,000 this 12 months. Her employer offers a 401(k) plan and fully matches a worker’s contributions as much as $5,000 every yr. Under which scenario does Latisha have a very powerful amount in retirement savings at year-end?
A) She contributes $2,000 to the 401(k) plan and invests the money in a mutual fund that earns a 5% return throughout the 12 months.
B) She contributes $2,000 to an IRA and invests the money in a mutual fund that earns a 5% return throughout the 12 months.
C) It doesn’t matter — she goes to have the similar amount of year-end savings either way.
D) Don’t know.
5. On average throughout the U.S., how long will a 65-year-old man/woman live?
A) Man age 79, woman age 82.
B) Man age 84, woman age 87.
C) Man age 89, woman age 92.
D) Don’t know.
Answers: A, A, B, A, B.
How’d you do?
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