Episode 126: What’s Your Retirement Income Literacy?

Today’s Prep:

Ready to put your retirement income knowledge to the test? Take this quiz and follow along on today’s podcast to see how you do.

(Click the featured times below to jump forward in the episode)

Equipping Points:

A 37-question retirement income literacy quiz from the American College Center for Retirement Income was recently given to 1,500 Americans aged 50-75. Unfortunately, the average score was far from passing at about 42 percent. David did miss two questions himself, but we’ll see how co-host Walter does. Ready to play along?

What is the most you can afford to withdraw each year to have a 95% chance that your assets will last for 30 years? You may have heard about the 4 percent rule, which this quiz seems to agree with. That said, some have started to say you might have to take out even less than that to be safe in retirement and not run out of money.

Do you know when you have to start taking RMDs? Or what the life expectancy is of a 65-year-old man? Can you contribute to an IRA or Roth IRA if you are still working in retirement?

We also cover a few questions with answers that may surprise you. For instance, do you know who provides the majority of long-term care services? You might think it’s done in an assisted living facility, but a lot of times because it is so expensive, family members provide care. Nationally, who pays for the majority of long-term care expenses?

Our final question on today’s podcast is about a 401(k) plan. If a large company sponsoring the 401(k) goes bankrupt, are your assets at risk? Thankfully, those are separate from any claims of the creditors of the company filing for bankruptcy.

How did you do? Ready to take the entire quiz to get your score? If you’ve been listening to this podcast for some time, you likely scored higher than the average. And for the ones you missed? Be sure to go back and learn the right answer so you’re prepared for the future.

Listen to the entire episode or use the timestamps to skip to a particular quiz question.

[0:56] – Could you pass this retirement income literacy quiz?

[3:14] – What’s the most you can afford to withdraw each year to have a 95% chance that your assets will last for 30 years?

[5:12] – What is the average life expectancy of the average 65-year-old male?

[6:33] When do you have to start taking RMDs?

[8:22] Can a working retiree contribute to an IRA or Roth IRA?

[9:53] What medical expenses will traditional Medicare cover?

[11:22] – Nationally, who pays the majority of long-term care expenses?

[12:50] – Who provides the majority of long-term care services?

[16:09] – Is your 401(k) at risk if the company sponsoring the plan goes bankrupt?

[18:24] – How did you do?

Today’s Takeaway:

Is there something that I need to know before I go another year toward retirement?”

– David Dickens

Additional Resources:

PODCAST: Mailbag – Should I take Social Security Early?

PODCAST: What’s Changed with Inherited IRAs?

PODCAST: Where Can I Find Mutual Funds with 10 Percent Returns?

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More From David:

The host: David Dickens

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