Perhaps one of the reason so many Americans are unprepared for retirement is because there is a lot of confusion around the subject.
When The American College of Financial Services conducted a 38-question retirement literacy quiz, three out of four retirement-age Americans failed the test. To qualify, respondents had to be between 60 and 75 years old and have at least $100,000 in household assets, not including the worth of their primary residence.
Here's one of the questions that tripped up more than 60 percent of respondents:
If you had a well diversified portfolio of 50 percent stocks and 50 percent bonds that was worth $100,000 at retirement, based on historical returns in the United States the most you can afford to withdraw each year is about ____ plus inflation each year to have a 95 percent chance that your assets will last for 30 years.
- Don't know