Retirement Pop Quiz!

Retirement Planning Quiz

With my extensive background in both finance and education, quizzes help people learn and remember important things. I can't think of anything more important than saving for your future....especially your retirement.  Here are a few questions you should ask yourself and if you do not know the answers to them or want to find out more, schedule a time with me to discuss your financial plan. 

Test your knowledge of retirement planning and what you should consider when planning for retirement.

1 TRUE OR FALSE? US Savings rates are inadequate for retirement needs.


With U.S. Interest rates at all time lows, your earnings could be small if you chose only that route. 


2   TRUE OR FALSE?   Approximately 93% of individuals retire between the ages of 60 and 70.



I bet you thought it done much younger didn't you? 


3    TRUE OR FALSE? If people adequately save for retirement beginning at ages 25 to 35, they would need to save 10-13% of their gross annual income.


I bet you did not realize it was so high of a percentage!  Saving is key! 


4    TRUE OR FALSE? You should consider investing in a broad portfolio of growth investments over your entire working life.


This helps to make sure that you are not keeping all of your eggs in one basket.


 These questions are essential to formulating an efficient plan for your future legacy. 


Who will save the most money?  - The Power of Compounding


The earlier you save, the greater the number of future compounding periods you have before retirement. Compounding means that you will earn dividends on your dividends and/or earn interest on your interest so that your investments grow in an accelerated way. For example:


Ÿ  Paul earns $60,000 per year and saves $2500 each year for ten years.

Ÿ  Paul stops investing after 10 years and he does not begin to withdraw his savings/investments until age 65.


Even though Paul has invested $25,000 ($2,500 x 10 years), it will accumulate to $393,588, assuming the interest rate is 8% for the ten year period.


Ÿ  Victoria earns $100,000 per year and manages to save $25,000 for 30 years ( 35-65 years of age )

Ÿ  This will accumulate to $308,635 with an interest rate of 8%.


Even though Victoria saved $52,500 more than Paul, Paul earned $85,223 more by age 65. than Victoria.