In Retirement

Ready to test your knowledge? You'll have ten multiple choice questions to answer. Click on each question to reveal the question and multiple choice answers. After you've completed answering all ten questions, click "Grade Me!" at the end of the quiz to see how you did.

Question 1

What percentage of your retirement savings do most experts suggest you spend each year?

(A) 1 to 2 percent.	Correct Incorrect
(B) 3 to 5 percent.	Correct Incorrect
(C) 6 to 7 percent.	Correct Incorrect
(D) 8 to 9 percent.	Correct Incorrect

As you enter retirement, your goal is to have the savings you´ve accumulated through your working years last for the remainder of your life. Making withdrawals at a rate of 3% to 5% per year will allow you to preserve most of your principle and live off of the income earned off of that principle. If you spend at a higher rate and draw down your principle, you might run out of funds before you die. If you spend less, you might continue to accumulate savings well beyond what you might spend during your retirement years.

Question 2

After reaching full retirement age, how much money can you earn without impacting your Social Security benefits?

(A) $5,000 a year.	Correct Incorrect
(B) $14,160 a year.	Correct Incorrect
(C) $22,500 a year.	Correct Incorrect
(D) There are no limits for retirees that have reached full retirement age.	Correct Incorrect

Individuals who are receiving Social Security benefits are still able to work at the same time. However, if you´re younger than your full retirement age, there are limits on how much you can earn before your retirement benefits are reduced. But if you´ve reached full retirement age, those limits go away and you can continue to receive full benefits regardless of the amount of income you earn. Depending on the year that you were born, your full retirement age will range from 65 years of age to age 67 if you were born in 1960 or later.

Question 3

What types of retirement plans do not require minimum distributions?

(A) Roth IRAs.	Correct Incorrect
(B) 401(k) plans.	Correct Incorrect
(C) Traditional IRAs.	Correct Incorrect
(D) Roth 401(k).	Correct Incorrect

A required minimum distribution is the amount you must withdraw from your retirement account each year. You generally have to begin taking withdrawals from your IRA, SEP IRA, SIMPLE IRA or other retirement account when you reach age 70 1/2. However, Roth IRAs do not require required minimum distribution amounts until the owner of the account becomes deceased.

Question 4

Which of the following types of savings do experts recommend that you save to use last?

(A) CD Accounts.	Correct Incorrect
(B) Tax-deferred savings.	Correct Incorrect
(C) Money market accounts.	Correct Incorrect
(D) Inheritances.	Correct Incorrect

In order to avoid large tax bills that can heavily drain your retirement account, most experts recommend that you withdraw funds from tax-deferred savings accounts such as IRAs or 401(k)s last. Withdrawals from those types of accounts are taxed as ordinary income, which is typically a higher rate than even long-term capital gains rates.

Question 5

Which of the following are required to qualify for a reverse mortgage?

(A) The borrower must be at least 62 years of age.	Correct Incorrect
(B) You must occupy the property as your principal residence.	Correct Incorrect
(C) Any mortgage on the property must be low enough that it will be paid off with the reverse mortgage proceeds.	Correct Incorrect
(D) All of the above are requirements.	Correct Incorrect

The FHA Home Equity Conversion Mortgage (HECM) program requires homeowners to be age 62 or older, currently live in the home and have paid off your mortgage, or paid off a considerable amount. In addition, you cannot be delinquent on any other federal debt, and you must have sufficient financial resources to continue to make payments for such things as property taxes, insurance and HOA fees. You must also agree to participate in a consumer information session with a HUD-approved counselor.

Question 6

Which of the following retirement products will provide a steady stream of income throughout your retirement?

(A) Mutual fund	Correct Incorrect
(B) 401(k)	Correct Incorrect
(C) Annuity	Correct Incorrect
(D) Savings bond	Correct Incorrect

Annuities are contractual financial products that are designed accept deposited funds and generate interest or income during the accumulation phase, and to pay out a stream of payments for a defined period of time during the annuitization phase. These types of accounts were designed to be a reliable source of steady cash flow for an individual during their retirement years.

Question 7

Which of the following benefits is not provided by Medicare Part A?

(A) Hospital care.	Correct Incorrect
(B) Lab tests.	Correct Incorrect
(C) Doctor visits.	Correct Incorrect
(D) Getting a second opinion before surgery.	Correct Incorrect

In order to be eligible to receive a second opinion before having surgery, Medicare enrollees must Medicare Part B insurance. Second opinions are not covered under Medicate Part A.

Question 8

While the average life expectancy of a 65-year old man is an additional 20 years, what percentage are expected to live to 90?

(A) 10 percent.	Correct Incorrect
(B) 20 percent.	Correct Incorrect
(C) 30 percent.	Correct Incorrect
(D) 40 percent.	Correct Incorrect

According to the National Center for Health Statistics, 65-year old are expected to live an additional 20 or so years, on average. That same 65-year old has a one in four chance of living to age 90. What does that mean? It means that your retirement funds may have to last much longer than you might otherwise have planned.

Question 9

A "living will" primarily deals with?

(A) The dispersal of assets to one's heirs when you die.	Correct Incorrect
(B) A persons wishes regarding life prolonging medical treatments.	Correct Incorrect
(C) Who should receive Social Security survivor benefits when you die.	Correct Incorrect
(D) The dispersal of your personal belongings when you die.	Correct Incorrect

A living will is a written statement that provides details regarding a person´s desires regarding medicate treatment under circumstances where they are no longer personally able to express informed consent regarding their medical care. Having a living will allows your wishes to be carried out under those specific circumstances instead of having those decisions made by others.

Question 10

Retirees might want to continue having life insurance under which of the following conditions?

(A) They would lose a substantial portion of the family income when one spouse dies.	Correct Incorrect
(B) You have a large, illiquid estate, which will be subject to estate tax.	Correct Incorrect
(C) You still have non-adult children.	Correct Incorrect
(D) All of the above.	Correct Incorrect

There are still many conditions for retirees to keep life insurance policies intact. Among those are protecting your continued earned income that is still being generated during retirement, making sure there are liquid assets available to a spouse or other family members upon death and dealing with the uncertain needs of dependent children.

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