Are you saving enough for retirement? Do you know how much you’ll need to save to live the life you want in retirement?
These two questions can paralyze anyone who is approaching retirement age or beginning to think about retirement. There are many factors that influence your retirement savings: 401(k)s, IRAs, inflation, health care costs and so on.
To help you get a better idea of what you’ll need to save for retirement, we’ve created this Retirement Savings Quiz. Whether you feel unprepared or feel like you have a good handle on your retirement needs, this quiz can help. Go through and answer the questions, then check your answers at the bottom to see how you did.
What percentage of gross salary, including employer contributions, should you strive to save to finance a comfortable retirement?
If you are younger than 50, what is the maximum amount that you can you contribute to your 401(k) or similar employer-based retirement plan in 2015?
Workers 50 and older are eligible to make “catch up” contributions to their workplace-based retirement plans. What’s the maximum amount they can contribute to a 401(k) or similar plan in 2015?
Assuming you intend to retire at age 65, you should aim to accumulate savings equal to:
- 2 times your final annual salary
- 10 times your final annual salary
- 15 times your final annual salary
- 20 times your final annual salary
If you are within ten years of retirement and your nest egg isn’t sufficient, you should:
- Review your asset allocation
- Consider working a few extra years
- Take advantage of catch-up contributions if you’re age 50 or older
- A & C
- A, B & C
If you postpone claiming Social Security benefits beyond your normal retirement age, how much will future benefits be increased for each year you delay until age 70?
You should wait until you retire to shift your investments to a more conservative asset allocation.
Building a sizable nest egg is important because you might have to depend on those savings for a long time. For example, a 60-year-old couple has a 50% chance that one spouse will live until at least age:
To cover out-of-pocket medical costs throughout a 20-year retirement, not including long-term care, a 65-year-old couple would need:
Check your answers below. How did you do? If you got most of the questions correct, you are well-versed in retirement expenses and savings. If you didn’t do so well, at least you are now armed with more information to take action.
If you need help getting ready for retirement, the investment and financial planning professionals at Putnam Bank are here to help. Give us a call today!
Equal Housing Lender
Answers: C, D, C, B, E, C, false, A, C