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Quiz: Retirement Planning

By Timothy Haas

April 2004

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When you’re planning for retirement, realistic assumptions can mean the difference between comfort and catastrophe. Take this quiz to find out if you’ll be heading for stormy weather or sailing on golden pond.


Question 1:
To maintain your current lifestyle, what percentage of your annual employment income will you need in retirement?
  20 to 30 percent
  40 to 50 percent
  60 to 70 percent
  More than 70 percent

Question 2:
You’re a typical worker born in 1950 and making $50,000 a year. Assuming your salary does not change, roughly how much in today’s dollars would your monthly Social Security benefit be when you reach full retirement age?
  $729
  $1,039
  $1,450
  $1,998

Question 3:
When projecting the future size of your nest egg, how much investment growth should you assume each year?
  2 to 4 percent
  5 to 7 percent
  8 to 10 percent
  11 to 13 percent

Question 4:
Once you’ve reached age 65, what are the odds that you’ll live to 85?

  1 in 2
  1 in 3
  1 in 4
  1 in 6

Question 5:
Many boomers are counting on inheritances to ease their retirement woes. What is the median bequest that members of that generation have already received?
  $17,000
  $48,000
  $166,000
  $392,000

Question 6:
Many people say they intend to make up for low retirement savings by working longer. What are the chances of a worker becoming disabled before age 65?
  1 in 50
  1 in 10
  1 in 5
  3 in 10

Question 7:
What is the average daily cost of a semiprivate room in a long-term care facility in the U.S.?
  $87
  $158
  $209
  $436

Question 8:
Which of the following retirement benefits are backed by government insurance?
  Defined-benefit pensions
  Defined-contribution pensions
  Health insurance
  All of the above
  None of the above

Question 9:
If you’re already putting money into a 401(k) or another defined-contribution plan, how much can you put into a traditional tax-deductible individual retirement account (IRA) this year?
  $2,000
  $3,000
  Depends on your age and total income
  Nothing. If you contribute to a company-sponsored plan, you can’t have an IRA.

Question 10:
You’ve just turned 50 and haven’t saved a cent. If you start putting away $300 a month and assume 5 percent annual earnings, how much will you have stashed by your full retirement age of 66?
  $16,300
  $57,600
  $88,000
  $124,000