Quiz | February 2011
Reviving Your Retirement Plan: What to do Now
You may be shaken by the market meltdown, but you can't stop saving for retirement. With a little extra knowledge and some free advice, you should be well on your way to a comfortable future. You may have to save a little more and work a little longer, but you can still retire. Take our quiz to see how.
Quiz
Reviving Your Retirement Plan: What to do Now
Question 1 of 10
Your 401(k) balance took a big hit in 2008's market meltdown, but you're more than ten years away from retirement. You should:
A. Stop contributing to your retirement plan
B. Transfer all your money to cash
C. Defer investment decisions until the market rebounds
D. None of the above. .
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 1 of 10
Your 401(k) balance took a big hit in 2008's market meltdown, but you're more than ten years away from retirement. You should:
You're right! D. None of the above. . is correct.
Sorry, wrong!
is incorrect.
The right answer is D. None of the above. ..
Despite the market turbulence, now is not the time to stop investing. In fact, you may want to contribute even more to your retirement account if you can. Your regular contributions will buy more shares at lower prices, putting you in a better position to build wealth when the market rebounds. If you remain on the sidelines, you may miss out on the market bounce.
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 2 of 10
You are within ten years of retiring and your 401(k) balance is down 30%. You should:
A. Review your asset allocation to make sure it's still appropriate
B. Take advantage of extra catch-up contributions for workers 50 and older
C. Consider working a few years longer
D. All of the above
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 2 of 10
You are within ten years of retiring and your 401(k) balance is down 30%. You should:
You're right! D. All of the above is correct.
Sorry, wrong!
is incorrect.
The right answer is D. All of the above.
The financial turbulence of 2008 wiped out virtually all the gains of the previous decade. To make up those losses, you will have to save more or work longer or both.
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 3 of 10
If you are younger than 50, how much can you contribute to your 401(k) or similar employer-based retirement plan this year?
A. $6,500
B. $11,500
C. $16,500
D. $26,500
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 3 of 10
If you are younger than 50, how much can you contribute to your 401(k) or similar employer-based retirement plan this year?
You're right! C. $16,500 is correct.
Sorry, wrong!
is incorrect.
The right answer is C. $16,500.
Workers under age 50 can contribute up to $16,500 to their employer-provided retirement plans in 2010, the same as 2009 and $1,000 more than 2008.
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 4 of 10
How much can workers 50 and older contribute to their workplace-based retirement plans in 2010?
A. $10,000
B. $12,000
C. $22,000
D. $32,000
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 4 of 10
How much can workers 50 and older contribute to their workplace-based retirement plans in 2010?
You're right! C. $22,000 is correct.
Sorry, wrong!
is incorrect.
The right answer is C. $22,000.
Workers 50 and older can contribute up to $22,000 to their 401(k) or other employer-provided retirement plans. They can put in $16,500 in basic contributions and $5,500 in "catch up" contributions, the same as in 2009.
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 5 of 10
What should you do if your employer stops matching your 401(k) contributions?
A. Keep contributing to your company plan
B. Fund a Roth IRA
C. Save money in a taxable brokerage account
D. Any of the above
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 5 of 10
What should you do if your employer stops matching your 401(k) contributions?
You're right! D. Any of the above is correct.
Sorry, wrong!
is incorrect.
The right answer is D. Any of the above.
Just because your employer temporarily suspends your 401(k) match, you can't afford not to save for your retirement. Contributing to your 401(k) will give you upfront tax breaks. Saving in a Roth IRA, if you are eligible, will give you tax-free income in retirement. You'll pay capital-gains taxes on profits in a taxable account, but you can have access to your money anytime without age restrictions.
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 6 of 10
How does working a few years longer and delaying tapping your nest egg help rebuild your retirement savings?
A. You can continue to add to your savings
B. Your current assets have time to rebound
C. Your retirement savings don't have to last as long
D. All of the above
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 6 of 10
How does working a few years longer and delaying tapping your nest egg help rebuild your retirement savings?
You're right! D. All of the above is correct.
Sorry, wrong!
is incorrect.
The right answer is D. All of the above.
Working just a few extra years can have an enormous impact on your future retirement income by boosting your savings, possibly increasing your Social Security benefits and reducing the amount of time you need to rely on your savings.
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 7 of 10
Retirees should try to reduce their nest egg withdrawals in a down market so they don't run out of money.
A. True
B. False
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 7 of 10
Retirees should try to reduce their nest egg withdrawals in a down market so they don't run out of money.
You're right! A. True is correct.
Sorry, wrong!
is incorrect.
The right answer is A. True.
Bear markets can be devastating for new retirees. Normally, retirees should restrict their withdrawals to 4% of their portfolio the first year, increased by 3% for inflation in subsequent years. But in severe bear markets, you might want to reduce your withdrawals temporarily or there might not be enough left to benefit from improved earnings when the market recovers.
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 8 of 10
If you postpone claiming Social Security benefits beyond your normal retirement age, how much will future benefits be increased for each year you delay until age 70?
A. 5%
B. 6%
C. 7%
D. 8%
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 8 of 10
If you postpone claiming Social Security benefits beyond your normal retirement age, how much will future benefits be increased for each year you delay until age 70?
You're right! D. 8% is correct.
Sorry, wrong!
is incorrect.
The right answer is D. 8%.
For those who reach their normal retirement age in 2008 or later, your Social Security benefit is increased by 8% for each year you delay collecting benefits up until age 70. The normal retirement age is 66 for those born between 1943 and 1954 and gradually increases to 67 for those born in 1960 and later.
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 9 of 10
Another advantage of delaying retirement is continued access to employer-provided health insurance.
A. True
B. False
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 9 of 10
Another advantage of delaying retirement is continued access to employer-provided health insurance.
You're right! A. True is correct.
Sorry, wrong!
is incorrect.
The right answer is A. True.
If you retire before you are eligible for Medicare at 65, it may be difficult to find and to pay for health insurance on your own.
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 10 of 10
You can't contribute to a Roth IRA if your income is too high, but starting in 2010, anyone can convert a traditional IRA to a Roth IRA.
A. True
B. False
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Quiz
Reviving Your Retirement Plan: What to do Now
Question 10 of 10
You can't contribute to a Roth IRA if your income is too high, but starting in 2010, anyone can convert a traditional IRA to a Roth IRA.
You're right! A. True is correct.
Sorry, wrong!
is incorrect.
The right answer is A. True.
Before 2010, you couldn't convert a traditional IRA to a Roth IRA if your income was more than $100,000, regardless of whether you were married or single. Income eligibility limits have disappeared in 2010 (but income limits on Roth IRA contributions will continue). You will owe income taxes on the entire amount you convert to a Roth IRA.
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Quiz
Reviving Your Retirement Plan: What to do Now
Results: 0 out of 10 Right
See Also
Jump-Start Your Retirement Center
Retirees and the Shrinking Nest Egg
How to Cope With a Deflated IRA
A Sweet Deal on Roth IRA Conversions
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