A Scary Number of Older Americans Can’t Pass a Retirement Financial Literacy Quiz
Of the 1,244 Americans interviewed -- all of them between ages 60 and 75, and possessing at least
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Most are not prepared
The survey respondents were generally confident about their financial literacy -- 61% said they had "high levels of retirement income knowledge." Only 33% of those who felt that way actually passed the quiz, however. Overall, 74% of the total quiz takers scored below 60%, while another 13% received a D for a score between 60% and 69%. Of the rest, 8% earned a C, while 5% scored a B, and fewer than 1% managed to get an A.
"Over the next 12 years, an estimated 10,000 Baby Boomers will reach the age 65 every day," said
Most Americans do not know what to expect financially in retirement. Image source: Getty Images.
Retirement security
One of the biggest challenges retirees face is making their savings last as long as they do. But survey respondents did particularly poorly on questions relating to retirement security.
For example, only 33% of those surveyed understood that working for two extra years would do more to improve their retirement security than boosting their retirement account contributions by 3% for the last five years of their careers.
In addition, only 38% were aware of the "4% Rule," a commonly used guideline for the percentage of your retirement accounts' assets you can safely withdraw each year.
"Retirees are living much longer so there's a need for smart advice around how to turn consumers' nest eggs into something they can live on for up to three decades or longer in many cases," said
What can you do?
It's important to learn as much as you can in advance about what to expect financially when you retire. For most people, it's also a sensible move to meet with a financial planner -- ideally, well before you approach retirement age.
"The results of this survey are alarming and a stark reminder of the need to be prepared for the decades in retirement when you are not earning a steady stream of income," added Littell.
Whether you think you're prepared or you know you aren't, the first thing you need to be clear on is exactly where you stand. Start by mapping out an honest retirement budget that you can compare to the income you can reasonably expect from your savings,
The
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "
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