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Marcus Financial Literacy Test: Retirement Savings

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If you vowed to save more for retirement in 2020, we’ve got a handful of articles to help you think about how to save more. We’ve also got a challenge for you in the form of this financial literacy test focused on retirement. Test your knowledge and learn something new, or pat yourself on the back for answering these correctly.

1. True/False: In general, as you get closer to retirement, you should gradually reduce the risk in your portfolio. 

a. True

b. False

2. True/False: Contributions to your Roth IRA are tax deductible.

a. True

b. False

3. True/False: Contributions to a traditional IRA may be tax deductible. 

a. True

b. False

4. True/False: If you are contributing to a workplace 401(k) retirement savings plan, you cannot also contribute to a Roth IRA. 

a. True

b. False

5. Which one of these best describes an expense ratio?

a. A measurement of how much of a company charges to manage and operate an investment fund

b. The total dollar value of all the assets in a fund 

c. A measurement of how much a fund has grown in value daily, in comparison to how much it has lost

6. As of 2020, what is the 401(k) plan contribution limit for individual employees under 50?

a. $17,000

b. $18000

c. $19,500

7. When are you eligible to start receiving social security benefits? 

a. 55

b. 62

c. 65

8. According to the Social Security Administration, when is a good time to apply for your retirement benefits? 

a. 1 week before you want your benefits to kick in

b. 4 months before you want your benefits to kick in

c. 2 years before you want your benefits to kick in

9. Which one of these best describes the 4% rule? 

a. The percentage of income an individual should contribute to retirement each year

b. The rate at which an individual should increase their retirement contributions each year

c. A general guideline that refers to the percentage an individual should withdrawal from their retirement savings each year during retirement

10. True/False: You can choose your own investments and level of risk with a pension plan.

a. True

b. False

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