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?

Working for two years past the planned retirement date

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

I don’t know

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

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.

I don’t know

You typically cannot borrow from the cash value

The policy will expire after a specified period of time

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

If interest rates rise

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

Question Title

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

I don’t know

Can pay income even if the investment account goes to zero

Pays guaranteed income that varies based on market performance

Ensures that the investment account will not lose value

Only offers investment alternatives with fixed returns

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.