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Annuities in IRI Retirement Quiz


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The Insured Retirement Institute, or IRI, has an 11-question quiz on their website that tests retirement financing knowledge.  Julie Jason published these questions in The News-Times in her article “A Quiz to Fine-Tune Your Retirement Knowledge.”  The IRI is focused on educating people about annuities through their nonprofit trade organization.  The facts from the quiz are summarized below.

While 4% of the U.S. population was over the age of 65 in 1990, by 2050 20% of the population will be over age 65.  Proving how strong the impact of inflation is, a loaf of white bread went from costing 20 cents in 1960 to $1.18 in 2000.  Each year that you remain living, you increase the chances that you’ll live an even longer life.  Seventy-percent of the people who are at least 65 years old today will reach the age of 80.  If you plan to retire early, you will have a smaller Social Security payment at retirement along with less in savings, a smaller pension, and fewer dollars in your retirement plan.

Contribute as much money as possible to your qualified plans so that you can achieve financial independence in retirement.  Throughout your retirement, you’ll likely need around 70-80% of your pre-retirement income to live.  While some of your working years expenses will be gone in retirement, your health care costs will likely increase significantly.  Social Security, personal investments, and annuity payments are all sources of retirement income.  While an IRA rollover, annuitization, and a trustee transfer will keep your money safe from taxes, a lump sum distribution will subject your money to taxes.

If you take money from a retirement plan prior to age 59, you are subject to a 10% penalty unless you make a 401k annuity transfer.  In order to ensure that you have enough income to meet your retirement needs, you have to make a plan, set your timing, know any tax penalties, and be sure not to do all of the planning without the help of a professional.  Retirement planning is some of the most important planning you’ll do in your life, so having a professional to help you is key.

Written by Rachel Summit

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