Today's Hack

Are you ready for a pop quiz? Today we’re going to do a retirement planning pop quiz. Can you ace these questions?

Let’s play a fun round of retirement pop quiz. Can you get an A+ and ace these retirement planning questions? Don’t sweat it though, there’s still time to learn more and meet with an advisor if needed!

At what age should people start saving for retirement?

A. When you begin working

B. When you buy your first home

C. When you pay off all your debt

When’s the right time to plant a tree? Now. As soon as you start working is the best time to start. The younger you start the habit of saving, the easier it becomes later in life.

Which of these is the best estimate of how much income you’ll need in retirement?

A. 50% of your current income

B. 85% of your current income

C. 100% of your current income

D. None of the above

Like with many things it depends. General rule of thumb is between 85% and 100%. You need to determine if the lifestyle you have today is how you want to live in retirement. Consider which bills you’ll have and which you’ll be done paying. You can always make these adjustments to your plan.

Which do retirees fear the most?

A. Leaving no money to the kids

B. Running out of money

C. Needing nursing home care

Running out of money is the biggest concern. With more longevity in our lives, the more risk we have of running out of money.

Which of these examples best represents a diversified plan?

A. A mix of 60% stock and 40% bonds

B. Three rental houses and cash

C. Ten to twelve mutual funds

D. None of the above

Probably none of the above. The type of diversification that works best for you is going to depend on your risk tolerance.

To avoid running out of money in retirement you should only take out _______ from your portfolio each year?

A. 1%

B. 4%

C. 6%

D. Find a different strategy

Find a different strategy. Rules of thumb don’t always work. It comes back to risk and how you are positioning your assets. Work with an advisor to know how much money works with your plan.

[1:24] – At what age should people start saving for retirement?

[4:14] – How much do you need for income in retirement?

[9:25] – Which do retirees fear the most?

[11:17] – What best represents a diversified plan?

[16:42] – To avoid running out of money, only take out how much?

A Quotable Moment:

“You don’t want to get into retirement planning on $3,000 and you get in there and everything works great and a year later you realize you’re spending $6,000.”

-Phil Putney

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