Wednesday, January 1, 2014

Are You Prepared for Retirement?

     Are you dreaming of retirement, or are you already there? Either way, you can test your knowledge on the subject, and benefit from the results, by taking this simple 14-question test. Go ahead and find out what your Retirement IQ is . . .

     1. Financial experts estimate that you can spend how much of your retirement assets per year?

a) 2%    b) 4%    c) 6%    d) 8%    e) 10%

     2. You're 66. How much longer (according to Social Security actuarial tables) can you expect to live?

a) 10 years    b) 14 years    c) 18 years    d) 22 years    e) 26 years

     3. You're retiring. Maybe you know where you're going to live. But most retirees live:

a) in their old house    b) in a smaller home near their old neighborhood    c) farther out in the country    d) at the seashore    e) in a Sunbelt retirement community

     4. Not everyone moves to the Sunbelt. But if you do, where are you most likely to go?

a) Florida    b) Arizona    c) the Carolinas    d) Pacific Northwest    e) Hawaii

     5. At what age can you start receiving Social Security benefits?

a) 59 1/2    b) 60    c) 62    d) 65    e) 66

     6. What is the average monthly Social Security retirement benefit?

a) $975    b) $1020    c) $1222    d) $1274    e) $1492

     7. Do you have to pay income tax on your Social Security benefit?

a) no    b) depends on how much income you have    c) depends on where you live    d) depends on how old you are    e) all of the above

     8.  At what age do you max out the monthly amount of your Social Security benefit?

a) 65    b) 66    c) 70    d) 72    e) never

     9.  At what age are you eligible for Medicare?

a) 59 1/2    b) 62    c) 65    d) 66    e) 67

     10.  You have probably heard of long-term health insurance that will pay for a nursing home. What are the chances you will actually end up in a long-term-care facility?

a) 5%    b) 10%    c) 25%    d) 33%    e) 50%

     11. What are the chances you'll get Alzheimer's?

a) 5%    b) 8%    c) 13%    d) 21%    e) 48%

     12. What's the number 1 killer of older Americans?

a) cancer    b) heart disease    c) stroke    d) suicide    e) traffic accident

     13. What is the favorite activity of retirees?
a) sports    b) travel    c) family    d) sex    e) relaxing

     14. Not everything's about medicine or money . . . who was a member of the Traveling Wilburys?

a) Roy Orbison    b) Johnny Cash    c) Bruce Springsteen    d) Orville Redenbacher    e) Arlo Guthrie

     How do you think you did? Check back on Sat., Jan. 4 for the answers.


Linda Myers said...

Oh, Tom! We have to wait for the answers? No fair!

Stephen Hayes said...

I'm curious about the answer to #10. My father-in-law paid for nursing home insurance for thirty years but when he needed one he couldn't find a place that would take him. On a brighter note, here's wishing you a peaceful and prosperous New Year.

rosaria williams said...

Darn if I know. Looking forward to the answers.

Anonymous said...

I have 2 excellent LTC policies, one I purchased in my 40s from Bell, the other in my fifties from the US government ( am a federal retiree).

1/ the women in my family tend to end their lives in a nursing facility.

2/ I can use my policies to cover at home care, which if David predeceases me I might need if I have a major surgery.

3/ Not going to live with a child or sibling…ever.


Meryl Baer said...

I did not write down my answers and now I have to wait until Saturday! By then I will forget my answers...

Tom Sightings said...

Meryl and others: Sorry, but I want to give other people a chance to take the quiz. Besides, it will take me till Saturday to write up all the answers!

Douglas said...

Nobody is ever ready for retirement. It sneaks up on you and it's "Katy, bar the door!" after that. I prepared all my life for retirement. I always thought it was upside down; we should start out at age 20 retired and then, after 20 or 30 years, go to work until we die. But nobody listens to me.

Kirk said...

The answer to #1 (known as the "safe withdrawal rule") has traditionally been 4%, but that can vary widely according to how retirement assets are invested. I've seen advisers say 3% is better, while others state that 4.5-6% can be done.

There are many assumptions that have to be accounted for in order to come up with a personal figure, and that number needs to be recomputed often in retirement. There are many calculators that perform Monte Carlo simulations to arrive at the probability that your money will survive you.

Simulators can be used to calculate how much you need to have prior to retirement, and then afterwards when your post-retirement expenses are known to calculate the survivability of the assets. Generally the simulations should go out at least to age 90.