Do you feel financially secure?
According to a recent survey, 47 percent of Americans are confident about their financial health. However, when pressed with a financial quiz, only six percent of respondents passed.
If that number leaves you wanting to brush up on your financial concepts, you can start with three facts that people got wrong most often.
1. The typical married couple will spend $265K on health costs in retirement
Does this number sound high to you? You’re not alone. Most of the participants in the quiz dramatically underestimated how much retired couples need to afford medical costs (and this is with Medicare coverage and supplemental insurance).
Remember, it’s never too late to start a retirement savings account. If you delayed saving for your post-career life, you can always play catch up by contributing a larger sum every month.
2. The typical 65-year-old woman will live another 23 years (another 20 years for a man)
According to the Social Security Administration, men and women are expected to live well into their 80s. While contemplating your life span isn’t the most fun way to spend an afternoon, it can be helpful when planning your retirement savings. Make sure that you account for 20 years of expenses once you begin your life’s third act.
3. The annual rate of inflation for college tuition is eight percent
College isn’t getting any cheaper. In fact, at eight percent inflation, tuition for higher education doubles every nine years. Let this be a wake-up call if you or your kids plan on attending college in the future—you’ll most likely need to apply for a student loan.