Many Americans weren’t saving enough for retirement before the financial meltdown of 2008. Now, with millions of people having lost large chunks of their retirement savings, the question remains: “Am I saving enough for retirement?”
Iowa State Bank is here to help with a retirement quiz that will hopefully help you identify any weaknesses in your savings strategy. Answers can be found after the questions, but no peeking!
- What percentage of your gross salary should you be saving (including employer contributions)? A. 5% B. 10% C. 15% D. 20%
- If you’re 50 or younger, what is the maximum amount you can contribute to your 401(k) or other employer-based retirement plan in 2013? A. $7,500 B. $12,500 C. $14,500 D. $17,500
- What’s the maximum amount allowed for “catch-up” contributions for those 50 and over and their 401(k)s in 2013? A. $10,000 B. $12,000 C. $23,000 D. $30,000
- Your employer offers both a traditional 401(k) and a Roth 401(k). Can you contribute to both? A. Yes B. No
- You’re aiming to retire at age 65. How much should your savings equal? A. 2 times your annual salary B. 5 times your annual salary C. 10 times your annual salary D. 20 times your annual salary
- You’re within ten years of retirement and your nest egg isn’t sufficient. You should: A. Review your asset allocation to be sure it’s still appropriate B. Take advantage of catch-up contributions C. Consider working a few years longer D. All of the above
- If you delay your Social Security benefits until after normal retirement age, how much of an increase will your benefits get each year until age 70? A. 5% B. 6% C. 7% D. 8%
- True or False: you should wait until you retire to move your investments to a more secure allocation. False
- A 60-year old couple has a 50 percent chance that one of them will live until age: A. 71 B. 81 C. 91 D. 101
- To cover out-of-pocket medical costs through a 20-year retirement (not including long-term care), a 65-year-old couple would need: A. $40,000 B. $140,000 C. $240,000 D. $340,000
Check your answers below. How did you do? If you found you didn’t know the answers to many of the questions, don’t be discouraged; you’re in the majority. But, now you know what you need to in order to finance a great retirement. If you need help building your nest egg, Iowa State Bank will be glad to help. Just get in touch with us today to get started!