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Would you pass the retirement income quiz?

August 9, 2021

When we think of retirement and what it will look like, there are many unanswered questions. Will Social Security be around, and if so what will my benefit be? How much money will I need saved to retire and how much can I use each year? How should I invest my retirement savings? These questions can seem overwhelming. However, making the right decisions when it comes to your retirement can provide you more protection and income when coming face-to-face with uncertainty. In a study completed by The American College New York Life Center for Retirement Income*, only 19 percent of participants received a passing grade of 60 percent or higher on a retirement income literacy quiz. Some key findings to the report are below:

  • Thirty-one percent of participants knew they could “safely” withdraw $4,000 per year from a $100,000 retirement account (the four percent safe withdrawal rule).
  • Fifty percent of participants underestimated the life expectancy of a 65 year old man. This suggests they don’t realize how long they may live and how long their assets must last.
  • Thirty percent of participants understood that working two years longer or deferring Social Security for two more years was more effective than increasing their retirement contributions by three percent for five years prior to retirement.
  • Thirty-nine percent of participants understood that bond funds decrease significantly when interest rates risk significantly.
  • Fifty-three percent of participants knew if you were to live until age 90, it’s best to wait and claim Social Security at age 70.

On top of these statistics, we learned only one in four people have a formal written retirement plan. If we have learned anything from this study by The American College New York Life Center for Retirement Income, Americans could use some more education around how to prepare for retirement and have the right amount of income.

Test your knowledge with the 2020 Retirement Income Literacy Survey here

If you want to create a formal retirement plan, review if you are on track or just ask questions you have around this topic, we’re pleased to partner with the TS Prosperity Group. TSPG assists our clients with holistic retirement planning and investing for their future. Contact your banker or call 1.844.487.3030 to see how these services may be able to assist you.

*The American College New York Life Center for Retirement Income: https://retirement.theamericancollege.edu/research/2017-ricp-retirement-income-literacy-survey

At The Bank of Tioga, we IGNITE PROSPERITY® by helping our clients do more with their money. Whether it’s saving a little extra cash each month or accomplishing a long-term strategy, our goal is to help you transform your financial life. Call and schedule an appointment today, one of our team members would love to help you do more with your money at The Bank of Tioga. The Bank of Tioga has two locations in North Dakota. For more information visit thebankoftioga.com or call 701.664.338 for Tioga or 701.965.6333 for Crosby.

Investment products provided by TS Prosperity Group are: • Not a Deposit • Not FDIC Insured • Not Insured by any Federal Government Agency • Not Guaranteed by the Bank • May Go Down in Value