Can you pass this basic retirement knowledge quiz?

Most adults won't
͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ 
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April 23, 2024
Retire with Money

Do you know your retirement ABCs? Most U.S. adults don’t, according to the results of a recent retirement fluency survey.

The five-question pop quiz from TIAA Institute, a think tank owned by financial services company TIAA, was distributed to 4,000 adults earlier this year. On average, respondents scored a lackluster 40%.

You read that correctly: The average U.S. adult can’t pass a five-question test on basic retirement knowledge. Nineteen percent of people answered zero questions correctly, slightly more than the share who answered four or more correctly.

Not surprisingly, older respondents had better test results. “Silent Generation” members, born roughly between 1928 and 1945, answered 50% of the questions correctly, on average. Gen Zers, on the other hand, scored an average of 28%.

Want to see how you measure up? Take the test below, and then check your answers at the bottom of my latest story. Don’t forget to share your results with me, or any burning questions you might have, at mcags@money.com.

— Mary Ellen Cagnassola, Money reporter

Mary Ellen Cagnassola

1. Which statement about Social Security is false?

A) The amount someone receives in Social Security benefits depends upon his/her earnings during the last two years of full-time employment.
B) A worker receives Social Security benefit payments if he/she becomes disabled before retiring.
C) Social Security benefit payments will continue as long as an individual is alive, no matter how long he/she lives.
D) Don’t know.

2. Susan worries about living a long life and running out of money. What is the best way for her to address that possibility?

A) Buy an annuity.
B) Buy life insurance.
C) There is nothing she can 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 year. Her employer offers a 401(k) plan and fully matches a worker’s contributions up to $5,000 each year. Under which scenario does Latisha have the largest 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 during the year.
B) She contributes $2,000 to an IRA and invests the money in a mutual fund that earns a 5% return during the year.
C) It does not matter — she will have the same amount of year-end savings either way.
D) Don’t know.

5. On average in 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)

P.S. If you got this newsletter from a friend, sign up here for email delivery to make sure you don't miss the next issue.

Stat of the Week: 83%
Savings
Money; Getty Images

Teens today have a lot on their minds, including retirement, according to a recent study by Junior Achievement and MissionSquare Retirement. More than 80% of adolescents ages 13 to 18 said they have thought about their retirement, and 78% believe they’ll be able to retire comfortably when they get there.

Retirement 1, 2, 3
Oklahoma
Visit Oklahoma City
  • 🏙️ Need some ideas on where to retire? Money recently published its annual Best Places to Live, a list of 50 U.S. cities offering vibrant local culture, affordability and robust local economies.
  • 💸 Some 401(k) savers are concerned about the impact of high-cost mutual funds fees and lower-quality investment options on their balances, The New York Times reports.
  • ✍️ Many retirees are forced out of their jobs sooner than planned, like communications specialist Jackie Fishman, who wrote about her early retirement for Business Insider.

More Insights and Advice from Money
retirement
Most investors approaching their retirement years say that a traditional retirement won’t be possible for them.
Money; Getty Images

retirement
In the midst of the Great Depression, the passage of the Social Security Act established a national retirement age of 65 as the standard, guaranteeing that older workers could retire and receive crucial benefits for the first time in U.S. history.
Money; Getty Images

retirement
The last batch of April Social Security payments will make their way to certain beneficiaries this week.
Olive Burd / Money; Getty Images

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Now’s a good time to diversify your retirement nest egg

Sunday, April 21, 2024

Here's how you could beat inflation and market volatility. ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌

It’s a great time to make your savings grow

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CDs are making a comeback. Are you coming or what? ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌

Home makeover on a budget? We have just the thing.

Thursday, April 18, 2024

Lower rates and potential value boost — get started. ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌

Are you having credit report trouble?

Wednesday, April 17, 2024

Don't let mistakes hurt your credit score. ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌

What’s the right retirement age? Experts say it depends.

Wednesday, April 17, 2024

Also: Americans Now Think They'll Need a Record $1.46 Million to Retire Comfortably ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌

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