2020 Retirement Literacy Survey

December 9, 2020
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Greg Felton, CLU, ChFC, Sales Director
gfelton@nsslife.org

This study of 1,500 Americans was conducted earlier this year by the American College. Responders were between the ages of 50 to 70 and had at least $100,000 in assets excluding their primary home.

The survey had a little more importance to it this year since we are undergoing so many other extenuating factors. We have Covid-19, a troubled economy, a presidential election, record layoffs, and an acceleration of early or forced retirements.

Yet despite all of this turmoil, we live in the information age. We have 24/7 access to an almost limitless amount of information that should help us make better and smarter decisions. The survey was a 38-question online quiz. Eight out of ten people failed. The average score was 42% which means they got 16 correct out of 38 possible questions.

Here are some of the most common misses.

  • 8% of responses thought that long term care insurance would be needed in the future. In reality the correct number is 70%
  • More than 50% of people guessed that the average life expectancy of a 65-year-old man is 10 years. The correct answer is 15 years.
  • Only 32% of people knew that a safe withdrawal amount from a $100,000 account (if you want it to last?) is 4% or $4,000 per year.
  • Several Social Security questions were missed; early retirement penalty for taking money at age 62, divorced spouses collecting on their ex-spouse’s record, etc.
While some people did well on the survey clearly the majority did not. The important point here is that we can and should be better prepared. One key element is a well laid out plan for financial success. Working with a financial advisor your plan will help position you for success. NSS works with some of the best in the business. If you would like to be better prepared for your future, call your local NSS representative or Joe Elliott in the home office.