Test Your Retirement Knowledge: Can You Beat the Average Score on this Quiz?

Are you ready to challenge your knowledge of retirement financial literacy? Many people lack basic understanding of personal finance principles, as evidenced by low average scores in various retirement quizzes and indexes. But fret not, as you’re about to learn how planning and financial literacy can set you on the path to a secure retirement. As we delve into Fidelity’s retirement literacy quiz, be prepared to test your understanding and gain insights on critical financial concepts.

1. Percentage of Annual Income to Save: Financial experts generally recommend saving about 15% of your annual income, with some now advocating for 20%. The right answer for you, though, depends on factors like your age, retirement goals, expenses, and more. Utilize tools like the Boldin Retirement Planner to tailor savings strategies to your unique situation.
2. Savings Compared to Pre-Retirement Income: Experts suggest aiming to save 10-12 times your last full year of income. However, don’t be discouraged if you fall short; there are various strategies, like working longer or tapping into home equity, that can bolster your retirement savings.
3. Average Stock Market Returns: Over the past 40 years, the stock market has yielded positive annual returns in more than 30 out of 40 years. It’s essential to understand the market’s ups and downs and align your investment strategy with your long-term financial goals.
4. Savings Growth: Saving $50 monthly with an assumed 7% annual return would result in roughly $40,000 after 25 years. It’s crucial to invest wisely, diversify your portfolio, and adapt your investment approach as you age.
5. How Long Should Savings Last: For a male retiring at 65, savings need to last about 18-19 years, considering an average life expectancy of 84. Remember, life expectancy varies, and you should tailor your retirement plan to suit your individual circumstances.
6. Average Social Security Benefit: In 2024, the average monthly Social Security benefit is approximately $1,900. To maximize benefits, consider delaying your Social Security to receive higher payouts.
7. Percent to Withdraw in Retirement: The 4% rule suggests withdrawing 4% annually from savings, but it may not be universally applicable. Factors like investment returns, inflation, and personal spending habits should influence your retirement income strategy.
8. Biggest Retirement Expense: Housing tops the list of retirement expenses, closely followed by healthcare and transportation. Downsizing or leveraging home equity can help reduce expenses and enhance your financial security in retirement.
9. Out of Pocket Healthcare Expense: An average 65-year-old couple retiring in 2024 may spend $330,000 on out-of-pocket healthcare costs throughout retirement. While this serves as a benchmark, personalized estimates are crucial for accurate financial planning.

It’s evident that bolstering financial literacy and engaging in comprehensive retirement planning can significantly impact your financial future. By utilizing tools like the Boldin Retirement Planner, you can tailor your strategies, navigate uncertainties, and secure a comfortable retirement. Start enhancing your financial knowledge today to build a robust foundation for your retirement years.