The American College of Financial Services designed a test to see if Americans had enough understanding of retirement income to know when it's time to retire. The results show that they don't. Nearly 80% of participants failed the quiz.
Knowing the Basics
Jamie Hopkins, an Assistant Professor of Taxation at the American College says "basic income concepts and strategies is where people typically fell short. How much to spend in retirement? How to maximize Social Security or will I need long term care?
The sample contained 1,000 people aged 60 to 75 with at least $100,000 in assets.No one got an "A" scoring 91% or more. 80% failed; answering less than 60% of the questions correctly. This is surprising considering 55% considered themselves knowledgeable enough to meet their needs in retirement.
Just 27% of the respondents said they have a written retirement plan – even though 63% work with a financial advisor, and 52% were at least moderately concerned about running out of money in retirement. Even worse: 33% have never even tried to figure out how much money they'll need to save to retire.