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Are You Ready for Retirement?

Take this quiz to test your smarts and help secure your financial future

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Jade Schulz

Question 1 of 10

If you retire at age 65, your retirement will last about 20 years, on average.

According to U.S. Census Bureau data, the average life expectancy for an American at age 65 is an additional 18.8 years for a man and 21.4 years for a woman. Of course, there’s no guarantee you’ll live that long, but in budgeting and saving for retirement, it makes sense to plan for at least an average life span, to reduce the risk of outliving your money.

Question 2 of 10

It doesn’t matter how old you are when you claim Social Security retirement benefits. You get the same amount no matter your age.

The longer you wait to start collecting retirement benefits after you become eligible at 62, the higher the amount you will receive. For each month you delay up to age 70 (when you can claim your maximum benefit), your monthly payment goes up. If you can wait until 70, your benefit will be about 77 percent bigger than if you had claimed at 62.

Question 3 of 10

You need to save at least $1 million to ensure a secure retirement.

How big a nest egg you need depends on many factors, such as where you live (or plan to live) and the lifestyle you have in mind. Do you intend to keep working to supplement your savings? Do you want to travel more or pursue a hobby that carries costs? There’s nothing wrong with having ambitious plans and setting ambitious goals to fund them, but there’s no magic number.

Question 4 of 10

It’s a good idea to reduce debt before you retire.

Retirement income is typically lower than working income, so you don’t want to be carrying a mountain of debt into your later years. But remember that not all debt has the same effect on your finances. Focus first on high-interest debt such as credit cards and personal loans. Lower-interest, fixed-rate debt such as a mortgage may be less onerous. Carefully consider how aggressive repayment might affect your ability to save.

Question 5 of 10

You can’t collect Social Security retirement benefits if you’re still working.

You can continue working and still receive benefits. But if you are younger than your full retirement age (between 66 and 67, depending on your year of birth) and earn more than a certain amount, Social Security will temporarily withhold a portion of your monthly benefits. Once you pass full retirement age, this “earnings test” goes away, and Social Security increases your benefit to make up for the past withholding.

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Question 6 of 10

You don’t need to worry about health care costs in retirement. Medicare will cover it.

Medicare provides crucial coverage to tens of millions of older Americans, but it isn’t free. As with private insurance, there are monthly premiums ($174.70 for most enrollees in 2024), deductibles and out-of-pocket costs for doctor visits and treatment. Fidelity estimates that the average person who turned 65 in 2023 will need to have $157,500 saved to pay for health care over the course of retirement, a figure you’ll want to account for in your retirement budgeting.

Question 7 of 10

Setting aside some money for emergencies now will help steer you toward a more secure retirement.

Financial planners recommend having three to six months’ worth of living expenses available in emergency savings. Without ready cash to deal with a medical issue, major home repair or other unforeseen expense, you may have to dip into your retirement account, which carries costs both short-term (taxes and penalties on early withdrawals) and long-term (slowing the growth of your nest egg).

Question 8 of 10

I’m over 50 and haven’t saved for retirement. I’ve missed the boat.

It’s never too late to start saving for retirement. You still have time to build your nest egg with compounding interest and investment returns. Starting at age 50, the IRS allows you to accelerate your savings with “catch-up” contributions — higher limits than for younger workers on how much you can put into individual retirement accounts (IRAs) or workplace plans such as 401(k)s.

Question 9 of 10

The tax burden on your retirement income depends on where you live.

State tax policies vary widely. Some states tax Social Security benefits, pensions, military retirement pay or distributions from retirement accounts. Some exempt one or more of those things; some don’t tax any income at all. If you’re mulling a retirement move to a new state, check out local tax policies (including sales, property and income taxes) and other financial factors such as housing costs.

Question 10 of 10

There are things you can do every day to get you closer to your retirement goal.

Whether keeping to a budget, upping your savings by a few dollars a month or managing your health, there are small things you can do every day to get you ready to enjoy your retirement.

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