On the Web
February 16, 2016
Can You Pass this Retirement Quiz?
Most people in a recent retirement survey fielded by the American College of Financial Services were confident that they had saved enough money to live in comfort in retirement.
But how do they know if they’re on-track? Four out of five also flunked the survey’s retirement planning quiz, answering less than 60 percent of its 38 financial questions correctly.
What’s striking about the poor results is that the quiz takers were a select and relatively well-off group: 60- to 75-year-olds with at least $100,000 in financial assets, excluding their home equity. A majority of them also have a financial adviser. One would think that people with both investment and retirement experience would do better. This also raises the question of what the quiz results say about the financial outlook for retirees with fewer advantages.
Think you can do better? With the American College’s permission, Squared Away selected five of its questions for a short quiz for our readers. Some of the answers incorporate the American College’s expertise with that of the Center for Retirement Research, which supports this blog.
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What this really explains is why 28-year-old kids on Wall St. are driving Maseratis.
Read the first questions. It noted, ” based on historical returns”. Anyone using or suggesting 50% bonds in today’s economy is a fraud. Nil rates in the U.S. and negative in Europe, Japan and more. With U.S. rates poised to still go up, returns might be zero. Secondly, no one would suggest anything even close to historical stock returns at all. Maybe 5- 6.5%. No quiz, etc. presented like this to consumers should see the light of day.
Shame on the American College. This is drivel
EF Moody PhD MSFP MBA LLB BSCE
“Many don’t realize that the majority of institutional care is paid for by Medicaid.”
The answer above is misleading as the question did not ask about institutional care. It asked about long term care cost in general.
The question should be revised. Because private individuals cover the burden of the majority of long term care costs. Medicaid only picks up that final year or two when the care goes beyond the capability of the family.
I believe it’s wise to have more than 50% in stocks even after retirement, as bonds just haven’t done the job for awhile. An annuity and Social Security can serve as the safety net for necessary living expenses. I also agree with Rob that private individuals probably pay the bulk of long-term care. Medicaid kicks in after a patient’s finances have been essentially wiped out.