2020 RETIREMENT INCOME LITERACY SURVEY

According to the 2020 Retirement Income Literacy Survey, four in five older Americans fail to understand the basics on how to successfully plan for a financially secure retirement. How do you stack up?

This quiz is three pages long and consists of 38 questions. It should take about 13 minutes to complete.

SECTION 1: STRATEGIES FOR SUSTAINING INCOME THROUGHOUT RETIREMENT

Question Title

1. Choose the response below that best completes this statement:
If you had a well-diversified portfolio of 50% stocks and 50% bonds that was worth $100,000 at retirement, based on historical returns in the United States, the most you can afford to withdraw each year is about ____ plus inflation each year to have a 95% chance that your assets will last for 30 years.

$2,000

$4,000

$6,000

$8,000

I don’t know

Question Title

2. Choose the response below that best completes this statement:
To maximize the safe withdrawal rate from a portfolio over a 30-year retirement period, it is best to hold ___ in equities throughout retirement.

0-10%

25-35%

50-60%

90-100%

I don’t know

Question Title

3. True or false: Taking a portion (20-40%) of a retirement portfolio and buying a life annuity can protect against the uncertainty of life expectancy, ensuring that a basic level of spending is available throughout retirement.

True

False

I don't know

Question Title

4. A 25% negative single year return in a retirement portfolio would have the biggest impact on long-term retirement security if it occurs:

15 years prior to retirement

At retirement

15 years after retirement begins

The timing doesn’t matter

I don’t know

Question Title

5. Which of the following strategies is least likely to improve retirement security?

I don’t know

Deferring Social Security benefits for two years longer than 25 originally planned

Saving an additional 3% of salary in the five years prior to retirement

Working for two years past the planned retirement date

SECTION 2: HOW LONG YOU WILL LIVE - LIFE EXPECTANCY

Question Title

6. A 65-year-old man has an average life expectancy of approximately an additional:

10 years

15 years

20 years

25 years

I don’t know

SECTION 3: THE USE OF LIFE INSURANCE IN RETIREMENT PLANNING

Question Title

7. Which one of the following is true about cash value life insurance?

The policy will typically cost less than a term insurance policy.

You typically cannot borrow from the cash value

The policy will expire after a specified period of time

I don’t know

The cash value portion will accumulate tax deferred.

Question Title

8. True or false: The death benefit from a life insurance policy owned by an individual is income tax free for the beneficiary.

True

False

I don't know

SECTION 4: ANNUITY PRODUCTS IN RETIREMENT

Question Title

9. The lifetime income payout rate (the annual annuity payment as a percentage of the purchase price) for an immediate income annuity for a 65-year-old male today is roughly…

3-4%

6-7%

10-12%

14-15%

I don’t know

Question Title

10. An immediate income annuity that pays income of $1,000 a month is generally going to be more expensive…

I don’t know

For a man rather than for a woman

For a single person than for a couple

The younger the owner is when the annuity begins

If interest rates rise

Question Title

11. A deferred variable annuity with guaranteed lifetime withdrawal benefits…

Pays guaranteed income that varies based on market performance

I don’t know

Only offers investment alternatives with fixed returns

Ensures that the investment account will not lose value

Can pay income even if the investment account goes to zero

33% of survey complete.

2020 RETIREMENT INCOME LITERACY SURVEY

Question Title

Question Title

2. Choose the response below that best completes this statement: To maximize the safe withdrawal rate from a portfolio over a 30-year retirement period, it is best to hold ___ in equities throughout retirement.

Question Title

3. True or false: Taking a portion (20-40%) of a retirement portfolio and buying a life annuity can protect against the uncertainty of life expectancy, ensuring that a basic level of spending is available throughout retirement.

Question Title

4. A 25% negative single year return in a retirement portfolio would have the biggest impact on long-term retirement security if it occurs:

Question Title

5. Which of the following strategies is least likely to improve retirement security?

Question Title

6. A 65-year-old man has an average life expectancy of approximately an additional:

Question Title

7. Which one of the following is true about cash value life insurance?

Question Title

8. True or false: The death benefit from a life insurance policy owned by an individual is income tax free for the beneficiary.

Question Title

9. The lifetime income payout rate (the annual annuity payment as a percentage of the purchase price) for an immediate income annuity for a 65-year-old male today is roughly…

Question Title

10. An immediate income annuity that pays income of $1,000 a month is generally going to be more expensive…

Question Title

11. A deferred variable annuity with guaranteed lifetime withdrawal benefits…

2. Choose the response below that best completes this statement:
To maximize the safe withdrawal rate from a portfolio over a 30-year retirement period, it is best to hold ___ in equities throughout retirement.